GST on Cooperative Societies ₹20 Lakh Turnover Rule Explained
Cooperative societies are not automatically exempt from GST. If their annual aggregate turnover crosses ₹20 lakh (₹10 lakh for special category states), they must register and comply under GST, even if their activities appear non-commercial.
Let’s break down what the law says, which services are taxable, and how cooperative societies can stay compliant.
What Triggers GST Liability for Cooperative Societies?
As per Section 22 of the CGST Act, any person (including cooperative societies) is liable to register under GST if their aggregate turnover exceeds the threshold limit in a financial year:
| Region | GST Registration Threshold |
|---|---|
| Regular States | ₹20 lakh |
| Special Category States* | ₹10 lakh |
*Includes NE states, Uttarakhand, Himachal Pradesh, etc.
Key point: The ₹20 lakh limit applies regardless of the nature of activity — if the society provides taxable services (like maintenance, repairs, halls for rent), it must register once the limit is crossed.
CBDT & CBIC Clarifications
- CBIC FAQ (2017) and several Advance Rulings (e.g., Aundh Sahakari Grahak Sanstha Ltd) confirm:
Cooperative societies providing services to members are treated as ‘supplier’ under GST. - Circular No. 109/28/2019-GST: Even if the society recovers amounts from members (for maintenance, security, etc.), GST is applicable if value exceeds ₹7,500 per member per month.
What’s Considered in Turnover?
Cooperative societies must include all taxable supplies, exempt supplies, and inter-state supplies while computing aggregate turnover.
Examples:
- Monthly maintenance collections
- Rental income from common halls
- Fees collected for clubhouse, parking, etc.
If the sum of these crosses the threshold, registration is mandatory.
GST Compliance Checklist for Societies
Once liable, cooperative societies must:
- Register on GST portal within 30 days
- File monthly or quarterly GSTR-1 and GSTR-3B
- Collect GST @18% (standard rate on services)
- Issue GST-compliant invoices
- Maintain records as per Section 35 of the CGST Act
Expert Tip
“Many societies assume that services to members are exempt. But the GST law doesn’t distinguish between members and non-members when it comes to supply of service.”
— CA Anuradha Bansal, GST Advisor
Case Law Insight
In Aundh Sahakari Grahak Sanstha Ltd [Maharashtra AAR, 2018], the AAR ruled that societies providing maintenance and utility services must charge GST if threshold exceeded — even if services are rendered only to members.
When Is GST Not Applicable?
Cooperative societies may be exempt if:
- Turnover is below the threshold limit
- Providing only exempt services (e.g., water supply, electricity recovery at cost)
- Covered under specific government exemption (e.g., pure agent model with no value addition)
But these are limited and conditional.
FAQs
Q1. Is GST applicable on society maintenance charges below ₹7,500 per month per member?
No, as per CBIC clarification, such charges are exempt. However, if it exceeds ₹7,500, the entire amount becomes taxable.
Q2. Are housing societies different from other co-ops under GST?
No, the turnover threshold and liability are the same, though exemptions may apply based on activity.
Q3. What if society earns rental income from commercial tenants?
Such rental income is taxable and included in turnover. GST must be charged at applicable rates.
Conclusion
Cooperative societies need to assess their turnover carefully and not assume automatic exemption from GST. If their services — even to members — cross ₹20 lakh in value annually, GST registration and compliance is mandatory.