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WHETHER A CO-OPERATIVE SOCIETY WILL COME UNDER GST REGIME? No. Supply of service or goods provide to the members by a co-operative society registered under any co-operative law will not come under the provisions of the GST Act. Why? We shall look into the statutory provisions of the law and the Con
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Historically, supplies of goods or services by a co-operative society to its members were not considered taxable under GST, based on constitutional provisions and Supreme Court decisions.
Article 366(29-A) of the Constitution defines 'tax on the sale or purchase of goods' to include various forms of supply, including those by unincorporated associations or bodies of persons to their members.
Yes, Section 7(1)(aa) was inserted by the Finance Act 2021, aiming to treat a person (other than an individual) and its members as separate entities for supply purposes.
The Supreme Court held that expressions like 'body of persons' do not include incorporated companies or registered co-operative societies, suggesting they might not be taxed on member supplies under the pre-amendment law.
The Kerala High Court declared Section 7(1)(aa) of the CGST Act and its explanation unconstitutional, finding it ultra vires certain constitutional provisions, as it challenged the principle of mutuality.
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