As we know that 18% GST is made applicable on the maintenance payment made by very own members of the cooperative housing society to the same co-operative housing society managed by the same members themselves. I feel that this decision of the Government is not in line with the basic concept and principles of co-operative housing societies in India.
Hence, through this PIL, I appeal to Honorable Supreme Court of India to withdraw the GST (Goods and Service Tax ) applied by the Government of India on the Maintenance Payment made by very own members of the cooperative housing society to the same co-operative housing society managed by the same members of the housing society themselves. There are following valid questions to be considered before making GST applicable to the maintenance payment of the flats / house in Co-operative Housing societies:
1. The Co-Operative Housing / Residential societies in India are maintained by the very own members of these co-operative societies. These members of the societies come forward voluntarily to serve themselves through their own services to their own flats / houses in the society. These members are neither paid any salary nor monitory benefits for their services provided by them to themselves in the co-operative societies. Meaning, members are providing their own services to themselves. So, if I am providing the service to me and that service is also consumed by me only, then why should I pay the GST tax on it to the Government for the same?
2. The concept of co-operative for the housing societies is to manage the society by its members themselves, meaning there are no two distinct bodies i.e. Separate giver of services and separate receiver of the services do not exist in co-operative housing societies. It’s a one body like left leg supporting right leg and vice-versa to lift the entire load of the one body. Where is the concept of delivery of services within one body fit into this mechanism?
3. Why the maintenance of the houses / flats in the co-operative societies is considered as a Business? Any logic behind it?
4. We, as a resident members of the co-operative Housing society are already paying the Property Taxes on our house / flat to the Municipal Corporations, which is almost in the range of 20% to 100% of our annual maintenance. Then why are these property taxes levied on the flats if GST is also levied? Then withdraw property tax on flats.
5. Co-operative societies being the end point of consumption of the material or services from the outside vendors, the materials and the services used by the co-operative societies from the outside agencies / vendors are already charged with GST and are paid by the co-operative societies and these vendors in tern pay these taxes to the Government. The final amount with GST is charged to the maintenance of the members flat within the society for such services obtained from outside. Where is the question of charging of GST to members’ come into this picture? Do the government expect us again to charge GST of 18% on the same services to the members??
6. When the members purchase the house / flat in the co-operative society, then they already pay or paid the following taxes/ duties to the State Government on the Agreement Purchase value of the flat/house in Pre-GST era.
1. Stamp duty (6% in Maharashtra)
2. Registration charges (Rs.30,000/-)
3. Service tax (4 % in Maharashtra)
4. VAT (1%).
The above taxes are almost amounting 12% of the Agreement Value. Means, State and Central Government has already earned their taxes through the purchase of the house.
The same is applicable for the purchase of the house after GST and the total taxes would be increased to huge amount of 18% GST on the Agreement / Purchase Value. We, as an individual members are paying 18% GST for the purchase of the house and we cannot claim any refund of the same.
Meaning, the State and Central Government has already earned their taxes, then why do Government want to put the GST (18%) on the maintenance of these property? What is the Government Role in maintaining these properties which are fully maintained and by the members themselves? Is government giving any insurance to these co-operative societies in return?
7. GST is being charged on the Sinking Fund and Repair fund as well, it means more and more we save in the sinking fund for our own security of the house to re-build it in future in case of any calamities or in case of fire or in case of earthquake, we need to pay more and more taxes to government. Is government taking the responsibilities of the re-building of our houses / flats in the co-operative societies in case they are damaged, gutted in fire, or in earthquake or need to re-develop in future due to lack of original construction quality through the GST paid on these amounts??
8. Moreover, most of the members of these co-operative societies are the tax payers i.e. they file their own returns on their taxable income every year. The net amount leftover after paying the direct tax on the income is used to take care of household expenses one of which is the payment of the maintenance of the house/flat in the society. Is government giving refund claims to the members for the GST paid on the house maintenance into their direct taxes??
9. Why is the limit of GST applicability fixed to the maintenance amount of Rs.5000/- and above. What is the logic behind it?
10. Why the limit of collection below 20 lacs per annum is fixed for this? Is maintaining the Co-operative societies considered as a Business?? We are not running the business of maintaining the houses / flats, we are maintaining the houses / flats on our own to live in the better condition same as we maintain our body to live in the good health condition with the co-operations of our own body parts. Why is the business approach forced on the working or maintaining of the co-operative societies by putting the collection limits of 20 lacs?
11. By applying GST on co-operative societies, is government just trying to make more money through the hard earned money of the citizens maintaining their own houses by their own in cooperative housing societies?
To my notice, the government has not considered most of the points listed above before applying the GST on maintenance payment made by members to co-operative housing societies managed by themselves. There is no valid logic to apply GST on maintenance payment by the members to the cooperative housing society.
Hence, I request and appeal to Honorable Supreme Court of India through this PUBLIC INTEREST LITIGATION (PIL) to consider to WITHDRAW the GST applied on the maintenance payment made by the very own members of the cooperative society to the same co-operative society managed by the members of the same cooperative housing society themselves.
I request to provide the stay on the applicability of GST on the Maintenance Payment of the Cooperative Housing societies till the final verdict from Supreme Court of India is given on this PIL.
- Chief Justice of India