A recent report has clarified a crucial point about GST liability for cooperative societies — and it might be a wake-up call for many smaller entities that assumed exemption.
₹20 Lakh Turnover = GST Liability
According to a report published on May 17, 2025, cooperative societies are not exempt from GST if their annual aggregate turnover exceeds ₹20 lakh. This aligns them with other business entities in terms of tax obligations, dismissing the common misconception that cooperative societies enjoy blanket GST exemption.
What Does the Law Say?
Under Section 22 of the CGST Act, 2017, any person or entity — including cooperative societies — that supplies goods or services and crosses the threshold turnover is mandatorily required to register for GST and comply with the tax norms.
| Criteria | Applicability |
|---|---|
| Type of Entity | Cooperative Society |
| GST Registration Threshold | ₹20 lakh annual turnover |
| Law Applicable | CGST Act, 2017 – Section 22 |
| Exemption Status | Not exempt if over threshold |
Common Misunderstanding
Many cooperative societies believe that they are exempt due to their non-profit motives or structure. However, the law treats economic activity and supply of goods/services as the basis for GST applicability — not the type of organization. That means if a cooperative bank, credit society, or housing society offers taxable services and earns above ₹20 lakh, GST registration is compulsory.
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Experts Speak
Tax experts emphasize that this clarity is crucial, especially for housing societies, credit co-ops, and multi-purpose cooperatives, as many operate in a grey zone without proper GST compliance. This report urges these entities to review their revenue and services immediately.
Why It Matters Now
The clarification comes at a time when GST enforcement is tightening, and non-compliance can lead to penalties, interest, or even retrospective tax demands. For societies hovering near the threshold, even donations, maintenance fees, or service charges could count toward the turnover calculation.
Key Takeaway:
If you’re part of a cooperative society and your annual turnover has crossed ₹20 lakh, GST is no longer optional — it’s mandatory. Staying unaware is not an excuse the tax department will accept anymore.
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