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The amounts collected by the applicant towards Sinking Fund amount to advances meant for future supply of services to members, covered under SAC 9995 as “Services of Membership Association” and are taxable to GST @ 18%

Levy of GST— In the instant case, applicant is a residents welfare Association formed by individual apartment/flat owners is duly registered under the provisions of the Karnataka Apartment Ownership Act, 1972. The Applicant sought advance ruling with regard to the liability to pay GST on amounts which it collects from its members for setting up the 'Sinking Fund'/ Corpus Fund. . Section 13 (2) (a) stipulates that the time of supply of services shall be the earliest of the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under Section 31 of the CGST Act 2017 or the receipt of payment, whichever is earlier. In the instant case the applicant receives the payment earlier and hence the time of supply is the date of receipt of amount towards the sinking fund. Therefore the said amounts are liable to GST as they are advances towards future supply of services but not the deposits. Held that— SAC 9995 covers the services provided / to be provided by the applicant to its members under “Services of Membership Association”. The said services are taxable to GST @ 18% in terms of Sl.No.33 of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, as amended.
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