Page 122 - GSTL_13th August 2020_Vol 39_Part 2

208 GST LAW TIMES [ Vol. 39
2.2 For the purpose of achieving its objects, Applicant raises funds by
collecting contributions, (also called as charges in the bye laws of Applicant Soci-
ety), from members of the society.
2.3 The said charges, collected on monthly or quarterly basis, include
property taxes, common electricity charges, water charges, contribution to re-
pairs & maintenance funds, expenses on repairs and maintenance of the lifts of
the society, including charges to running the lifts, contribution to sinking fund,
service charges, car parking charges, interest on the defaulted charges, repay-
ment of the installment of the loan and interest, non-occupancy charges, insur-
ance charges, lease rent, non-agricultural tax, or any other charges.
2.4 Applicant Society uses the said funds for the specified purposes as
enumerated in the bye laws, e.g., property taxes and water charges collected by
the society from members is paid to the Municipal Corporation.
2.5 Applicant Society does not carry out any other activity other than
those mentioned in the bye laws of the society, as evident from its Annual Report
and Accounts.
2.6 Applicant has filed the present application for determining whether
the said activities carried out by them for their members qualify as supply as de-
fined under Section 7(1) of the CGST Act, 2017 & liable to GST, & if so, whether
they are correctly discharging their GST liability as per the illustrative invoices
attached to the present application.
2.7 As per Section 7(1)(a) all forms of supply of goods or services or
both for a consideration in the furtherance or course of business will qualify as
“supply” liable for GST. Thus, the supply is an inclusive definition encompass-
ing all kinds of supply, however only those transactions which are for a consid-
eration and in the furtherance or course of business will qualify as supply.
1 2.10 According to applicant’s submissions, though the definition of
‘business’, as per Section 2(17), Clause (e) of the CGST Act, 2017, includes provi-
sion of facilities or benefits to its members, on a case to case basis it has to be de-
termined whether any facilities or benefits have indeed been provided by the
society to its members. In the present case applicant does not provide any facili-
ties or benefits to its members. It merely manages the housing sociecty and thus
cannot be considered to be doing any business.
2.11 Further, applicant has submitted that, the definition of ‘business’
also fails on the touchstone of the ‘principal of mutuality’. The Supreme Court in
the number of cases has held, by applying the principals of mutuality, that a
housing society cannot be said to the providing any services to its members.
Thus, the activities carried out by the applicant do not amount to supply & are
not liable for GST.
2.12 The applicant made Additional written submissions on 7-1-2020 as un-
der :-
2.12.1 The activities carried out by the Applicant for its members does
not amount to supply as per a plain reading of the term “supply” under Section
7(1), and hence not liable for GST. Supply is an inclusive definition encompass-
ing all kinds of supply, however, only those transactions which are for considera-
tion and in the furtherance or course of business will qualify as supply. The soci-

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1 Paragraph number as per official text.
GST LAW TIMES  13th August 2020  122