RERA, GST to make society sites costlier
Buying a site in a co-operative housing society may soon become more transparent and more expensive. This is because housing societies now need to register under the Karnataka Real Estate Regulatory Authority and Goods and Services Tax (GST).
“The dream run of cooperative housing societies, which made hay during the property boom in Bengaluru and other major cities of Karnataka, has come to an end. The introductions of RERA and GST has proved to be a double whammy for the developers and a blessing in disguise for homebuyers,” said K Chandrakanth, a member of the Karnataka Homebuyers’ Association.
10,000 co-operative societies have to be registered
Though the societies had approached Karnataka and Bombay high courts (which deals with RERA) seeking relief from RERA, they have failed to get a breather. The court dismissed a batch of petitions which claimed that RERA had encroached upon the rights of CHSs under the Karnataka Cooperative Societies Act 1959. “All cooperative housing societies have to mandatorily register under RERA if the development works is incomplete. They can register now with penalty in case of default of any provision of the rules,” said Kapil Mohan, principal secretary in the housing department.
As of now, only one society had been registered under RERA. A senior official of the housing department said there are roughly 50,000 cooperative housing societies in Karnataka and a majority of these are in Bengaluru (urban and rural) and Mysuru. Of these, at least 10,000 cooperative societies, which are in the process of developing layouts, have to be registered under RERA.
Also, all CHSs have been brought under GST and they need to register under the new taxation regime as their turnover collections are likely to exceed the limit of Rs 20 lakh. A senior cooperative official said any transfer fee paid to the society by the new owner on exchange of ownership of flat will be taxable under GST at 18%,” the official added.