‘We oppose GST for housing societies since it burdens society members’

Suhas Patwardhan, president of Pune housing societies federation at his office in Pune on Monday.

Suhas Patwardhan is the chairman of the Pune district cooperative housing societies federation. He is also the director of the Maharashtra cooperative housing federation.

What is Goods and Services Tax (GST) for housing societies in Maharashtra all about?

All cooperative housing societies will have to be registered under the GST, especially those whose aggregate turnover exceeds ₹20 lakh annually. Aggregate turnover can include all taxable, and exempt services. Aggregate turnover means all billing other than municipal tax and sinking fund, and includes interest received from banks, and members.

How will GST affect housing societies? 

We welcome GST, it is very simplified process of taxation. Since it is new, there are a lot of misconceptions/confusions and misunderstanding regarding it. When we heard that cooperative housing societies will also be covered under the GST, we analysed the proposed bill through our chartered accountants and held discussions. We found that it was affecting the society members. According to the GST, if your monthly maintenance charges are in excess of ₹5,000 then the GST applicable will be at 18% of the bill, but we are opposing it, as it directly affects common members. We work on a no profit – no loss basis. Every society member is spending from his own pocket and there is no commercial activity nor sale purchase or profit making involved, thus, GST is an additional burden to the common member. Society funds are collected from within the society members and the society works as trustee on behalf of the members. Thus, GST should not be applicable. Also, the rule should be applicable to all societies not depending upon the members. We strongly oppose it.

How many societies are registered with the federation in Pune? How many societies will be affected by this? 

There are more than 15,000 societies registered in Pune district. In majority of the cooperative housing societies, members are mostly senior citizens and are not experts in cooperative laws as well as other bylaws, where we as the federation help them. At least 70% of Pune’s population lives in societies.

What is the aim of your federation? 

The aim of the federation is to educate people, to guide them regarding housing society rules/ registering the society, how to create an agenda, conduct meetings. We guide the societies in their workings of the bylaws. In short, the federation, which is a registered body since 1974, has been the bridge between societies and the government bodies.

What is your view about RERA? 

Real Estate Regulatory Agency (RERA) was a long standing demand of the federation. The reason being that the Maharashtra Ownership of Flats Act (MOFA) was never implemented well, it had a lot of loopholes but we are hopeful that RERA will balance out all the shortcomings of MOFA. RERA will bring in transparency; it will put a stop to funds diversion and ultimately help in bringing the property rates down. Pune housing federation had arranged a meeting and workshop for understanding RERA.