GST on maintenance bills of residential societies

The Schedule of GST rates for Services as approved by GST Council in the 14^th GST Council Meeting held on 19^th May, 2017 has provided for various Service Tax Exemptions to be continued in GST.   Entry no. 26 of the list of exemptions provides as follows:
 
Section 26. “Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –
(a) ……….
(b)………..
(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex.”
Thus, maintenance charges paid by residents of a residential complex to a residents’ society by way of reimbursement of charges or share of contribution are exempt if the amount paid by a resident is below Rs. 5,000 per month.
 
What if the aggregate receipts exceed the threshold exemption limit?
In the case of a residential complex having a large number of residents contributing less than Rs. 5,000 per resident per month, the total amount received by such society may exceed Rs. 20 lacs, which is the threshold limit for registration under Central Goods & Services tax Act, 2017.  Similar provisions have also been made in State Goods & Services tax Acts (collectively referred to as ‘the Act’ in this article).   The relevant provision with regard to registration under GST is as follows:

Section 22.(1) “Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.”
 
Aggregate turnover has been defined in the Act as under:
Section 2.(6) “Aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;” (emphasis supplied).
 
Further, Section 23 of the Act explains the provision further:
“23. (1) The following persons shall not be liable to registration, namely:––

1. any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act; (emphasis supplied)
2. ............"

‘Services not liable to tax or wholly exempt from tax’ is an expression which is open to several interpretations. Some experts are inferring it to mean that that since maintenance charges upto Rs. 5,000 per month per person only are exempt from the levy of GST and therefore, these are not wholly exempt from tax.  Some experts argue that these services are liable to tax beyond the ceiling and hence cannot be considered ‘not liable to tax’.
In the view of the author, these interpretations are fallacious, as maintenance charges below Rs. 5,000 are ‘wholly exempt from tax’ and ‘not liable to tax’.  Hence, there is no need for these societies to register under GST.  Even if they do register themselves, liability to GST will not arise except on other sources of revenue liable to tax, such as parking charges, income from putting up hoardings or telecom towers etc. which are not ‘by way of reimbursement