Order date: 31 May 2022

Facts:

• The Applicant, M/s. Monalisa Co-Op Society Ltd, receives a gratuitous payment from an outgoing member for the time he has resided in the society.
• The applicant claims that the gratuitous payment cannot be regarded as a consideration but rather in substance is a gift to the society as the member is paying on his own volition and hence not taxable under GST Act.

Issue: 

• Whether the receipt of a gratuitous payment is taxable under GST ?

Order:

• The Authorities observed that the society cannot at all accept voluntary donations from a Transferor or Transferee in transgression of the Model Bye Laws of Cooperative Housing Societies in Maharashtra and therefore the amounts received by the society from the Transferor cannot be considered as Voluntary donations.
• Further, the Authorities observed that the outgoing member being happy with the services received has paid contributions to the applicant society which is liable to be taxed under GST laws as consideration for good services received in the past. It is not that an outsider has given any contribution to the applicant society. The contribution made by the outsider is nothing but consideration, as per Section 2 (31) of the CGST Act, 2017.
• Hence the Authorities, held that the receipt of gratuitous payment from an outgoing member is taxable.