Page 123 - GSTL_13th August 2020_Vol 39_Part 2

2020 ] IN RE : APSARA CO-OPERATIVE HOUSING SOCIETY LTD. 209
ety charges levied on the members as per the Bye Laws is merely a contribution
towards the collective the maintenance and upkeep of the Society and cannot be
considered as “consideration” as defined in Section 2(31) of the CGST Act, 2017.
The Contributors do not derive any profit from the said contributions. As settled
by the various Supreme Court and High Court decisions, the Members of the
Society and the Society are not distinct persons. They are one and the same.
Thus, there is no flow of any consideration between two distinct persons. It is
merely a contribution by each Member to the Society. Thus, for this reason also,
the Society Charges levied on the Members cannot be termed as “consideration”.
In the definition of ‘business’ as defined in Section 2(17) of the CGST Act, 2017.
Clause (e) specifically provides that business shall include provision by a club,
association, society, or any such body (for a subscription or any other considera-
tion) of the facilities or benefits to its members. Applicant Society does not pro-
vide any facilities or benefits to its members. It is merely formed for managing
the housing society”. Thus, the applicant society cannot be considered to be do-
ing any business. Since Applicant Society and its members are one and the same,
it cannot be said to be doing any business with its own members so as to provid-
ing any supply.
2.12.2 Applicant’s case is exempt from levy of GST as per the Rulings of
the Maharashtra Advance Ruling Authority in the case of M/s. Lions Club of Poona
Kothrud [2020 (32) G.S.T.L. 474 (App. A.A.R. - GST - Mah.) and M/s. Rotary Club of
Mumbai Western Elite [2019 (30) G.S.T.L. 60 (A.A.R. - GST)].
2.12.3 Applicant has further referred to the decision of Hon’ble Calcut-
ta High Court in the case of Saturday Club Ltd. v. Assistant Commissioner, Service
Tax Cell, Calcutta & Ors., 2005 (180) E.L.T. 437 (Cal.) wherein the levy of Service
Tax is struck down on services provided to members of the club. Applicant has
also relied on the decision of Sports Club of Gujarat Ltd. v. Union of India (2010) 35
VST 375 (Guj HC) = 2010 (20) S.T.R. 17 (Guj.), where in the Hon’ble Gujarat HC
struck down the levy of service tax.
2.12.4 In view of the above decisions, the activities carried out by Ap-
plicant Society does not amount to supply and therefore they are not liable for
payment of GST.
2.13 Alternatively, without prejudice, if the Applicant Society is held to
be supplying services to its members, then the invoices raised by the Applicant
Society will not include the deduction claimed and exclusions made in the said
invoices.
3. Contention - As per the jurisdictional officer
The submissions made by the jurisdictional office is as under :-
3.1 As per the definition of the term “person”, in terms of Section 2(84)
of the CGST Act, 2017, in the instant case, there are two distinct persons, one the
Applicant Society and another is the member thereof. Though the Applicant has
contended that the Applicant Society and its members cannot be treated as dis-
tinct persons, by making reference to the principle of mutuality, all court rulings
cited by the Applicant were in connection with the Income Tax matters. The con-
cern is only with the element of service, if any, rendered by the Co-Operative
Housing Society to its members against some consideration, which may be in the
form of the monthly or quarterly charges. Therefore, the contention made by the
Applicant with regard to the principle of mutuality to establish their claim that
GST LAW TIMES  13th August 2020  123