Cooperative societies liable to pay GST if turnover exceeds Rs 20 lakh, says report
KOCHI: In an attempt to bring the cooperative societies run by political parties and other organisations under the GST net, a report by the Central GST, Central Excise and Customs deputy commissioner has revealed that any cooperative society with an aggregate turnover of more than Rs 20 lakh in a particular financial year shall be liable for registration under GST.
The report cited the provisions of Section 22 (1) of the Central Goods and Service Tax Act, 2017, to state that such entities are liable to pay GST. The report said that group deposit schemes run by cooperatives are like chits, and hence, liable to be taxed at 18%.
Further, the deputy commissioner stated that a chit fund in relation to a chit is chargeable under GST at the rate of 12%, provided that the credit of input tax charged on goods used in supplying the service has not been taken.
According to the GST department, a chit fund is a transaction where a group of subscribers agrees to pay a certain amount of money over a set period. In a chit fund, 'chit sala' or 'chitty gross amount' is the total amount of money that all subscribers pay for an instalment, without any fixed discounts.
The 'sala' is calculated by multiplying the monthly premium or contribution by the duration of the chit in months. Hence, it is chargeable under GST, it said. 'A cooperative society provides services to its subscribers in the form of facilities or benefits in the course of business for a 'consideration'.
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