GST applicable on activity of collection of property taxes and water charges by society for paying to municipal corporation

The Maharashtra bench of the Authority for Advance Ruling has held that the activity of collecting property and water charges from societies to pay to the local municipal corporation is taxable under GST. The applicant, a co-operative housing society, had approached the AAR, seeking clarity on whether property tax and water charges fall under the GST purview. As per the co-operative society bye-laws and in accordance with the provisions of the Ownership Flats Act and the Rules, a co-operative society must raise funds on its own or in collaboration with a promoter for social, cultural or recreational activities and the main objective of the society was to collect these funds from the promoter. As such, they wished to have a clarification to confirm if activities of collecting water charges and property tax would also fall under this purview. The Maharashtra bench of the AAR held that such a supply would fall under Section 7 of the GST act and thereby attract tax.