What is GST on the maintenance charges to be paid by the residents of a housing society?

GST is known as the Goods and Service Tax. This indirect tax law was passed by the Government of India on 29 March 2017. There are many indirect taxes included in this bracket like excise duty, VAT service tax, etc. People living in housing societies often are seen asking queries around

GST on maintenance charges. One of the most popular questions is ‘Is GST applicable on Maintenance Charges?’ I am here to throw some light on this.

People living in a housing society avail various facilities like security, elevators, basic maintenance, etc. hence they have to pay maintenance charges and yes, one has to pay GST on maintenance charges.

Maintenance is paid by the residents of the housing society to the RWA. The person can claim for tax exemption if the amount is more than Rs. 7000.

The welfare associations can not claim for tax exemptions on the maintenance collected by the residents of the housing society.

Hope this answer is helpful to you and you have got the idea GST on maintenance charges.

Hi, 

I am sure matters related to GST on Maintenance charges must have rattled many. And rightly so, taxes are hard to understand with all the clauses and conditions there are. I have personally struggled a lot to figure this out so I took a deep dive and finally found answers to my queries related to GST on society maintenance. So let me help you out here.

If you are living in flats which come under a housing society then you should know that GST on maintenance charges by RWA are applicable if the maintenance cost exceeds Rs. 7500 cap per month per member. But if the amount exceeds Rs. 7500 then the GST calculation will be based on the whole amount payable.

Let’s say maintenance charges are Rs. 9500 then the GST calculation will be based on the whole amount of Rs. 9500.

BUT

You should also know the GST is applicable only if the annual turnover of RWA is more than Rs. 20 lakhs. 

When it comes to GST on maintenance charges by builders, I am afraid that the exemption doesn’t hold any grounds in such a case. Until RWA is formed, the builders charge GST at the rate of 18% from the residents. In fact, builders can charge GST for under construction properties as well. 

When the RWA is formed the GST tax exemptions come into the picture. 

I hope I was able to clear your doubts regarding GST on maintenance charges collected by builder and RWA.

Hey there,

As we all know, we need to pay some maintenance charge for all the facilities that we avail in a housing society. But there is also some amount of GST on apartment maintenance which needs to be paid under certain circumstances. To be honest, I wasn’t aware of this until I had to actually pay the GST rate on maintenance charges of my housing society. And that is when I decided to understand why and when I need to pay GST on maintenance charges of residential buildings.

While looking for the answer, I came across the answers of Mr. Pankaj and Mr. Ashwin. They have explained the conditions when one needs to pay GST on maintenance charges quite clearly. I found Mr. Pankaj’s answer very informative so I went on to do some research on my own.

So, I would like to add a few more points to Mr. Pankaj’s and Mr. Ashwin’s answer on maintenance charges GST rate on housing societies.

• If the aggregate of all the maintenance charges of a housing society exceeds Rs. 20 lacs in a financial year, the housing society is required to register itself under the GST laws and is required to obtain a registration number.

• The housing society has to take into consideration property tax and the electricity charges paid by the members while computing the Rs. 20 lacs limit.

• It must be noted here that even if the limit exceeds Rs. 20 lacs for a housing society during a financial year, it cannot levy GST on maintenance charges for those residents of a flat whose monthly maintenance charges do not exceed Rs. 7500. It can only levy GST on members whose monthly maintenance charges exceed Rs. 7500.

I hope this added information on

GST on apartment maintenance along with the previous answers, helps you out too.

Last year my uncle bought a flat and of course was asked to pay the maintenance charge. Now the GST

on society maintenance charges by builder levied is about 18% if the flat owners pay more than Rs 7,500. Now we understand that for the betterment of the society and its people these charges are justified but we were shocked to know that most of us do not even know when to pay this tax and when not. My uncle researched a bit and got to know that he should not pay charges as the builder has no OC. Let me share further details so that you understand the reason for not paying the fee.

My uncle was asked to pay the maintenance charges and let me tell you there is

GST on maintenance charges of housing society if only it has the Occupancy Certificate. As per the NCDRC - The National Consumer Disputes Redressal Commission, no buyer should be given these charges for the maintenance of the project. My uncle was not aware of it and paid the charge only after the builder got OC.

In short, the answer to

is gst applicable on society maintenance charges, yes it is applicable but the builder must be having the OC. 

The builder cannot increase the maintenance charge. However after handing over the property to the buyer, if the society decides to increase the charge then the buyer need to pay the amount asked for.

This is all I can say about the GST

on society maintenance charges by builder.

If you have rented or bought a property you may already know that one of the expenses associated with purchasing a home is maintenance fees for apartments. The owners or tenants of apartments must pay these maintenance fees either monthly or yearly to maintain and operate their structures. The upkeep of your apartment and the common areas is crucial since it determines how long these vertical buildings remain. But is GST applicable on maintenance charges collected by builders? I will tell you.

The majority of gated communities provide their residents with a variety of amenities to help them have peaceful and affluent lives. Property owners in these communities pay monthly maintenance fees in exchange for these amenities and services. Additionally, maintenance fees for flats or apartments are subject to the Goods and Service Tax.

GST on building maintenance

Buyers sometimes have no idea about the parts of maintenance charges containing GST fees. Both the components for which GST charges must be paid and the lowest maintenance expenses for which GST will be applied should be understood.

According to a circular issued by the Finance Ministry on July 22nd, 2019, housing societies must fulfil the following guidelines in order to collect GST on their maintenance expenditures.

• If the total yearly maintenance cost turnover reaches Rs. 20 Lacs, GST is applied.

• If a housing society contributes more than Rs. 7500 per member per month to the Resident Welfare Association (RWA), they must pay 18% GST.

Therefore, the following requirements must be satisfied for GST to apply.

GST on maintenance charges by society: GST Calculation

• The difference sum is exempt from the GST. If monthly flat maintenance costs come to Rs 10,000, for instance, the entire sum is subject to GST. As a result, GST will be applied to the entire amount and not only the first Rs. 2500.

• GST must be paid at an 18% rate, which is Rs 1800.

• Each flat's maintenance fee in a complex with two units costs Rs. 7,500.

• GST of Rs 15,000 for the two apartments will be exempt.

Elements of Maintenance Charges on Flats Eligible for GST

The housing society is exempt from the requirement to add GST to every item on the members' invoice. The housing society pays a variety of taxes and utility bills on behalf of the residents, including municipal taxes, property taxes, water bills, non-agricultural land taxes, energy bills for shared amenities, etc., and these are included in the exempted items. In a similar vein, GST is not charged on contributions made to the sinking fund. As part of the maintenance fees for flats, the housing society is obligated to add GST to the member contributions made to the repair fund.

Property developers charge residents a 1-2 year maintenance fee on apartments when they take possession. Customers can find out how much GST the builder costs them by looking at their maintenance invoices. If the builder transfers the maintenance to the RWA within these two years in the case of advance maintenance, the clients will be reimbursed.

Now you have the answer to is GST applicable on maintenance charges collected by builders.

Many of you who live in society probably wonder if can builder charge GST on maintenance. In India, an indirect tax known as the Goods and Services Tax (GST) is imposed on the provision of goods and services. The builder adds 18% GST to the monthly maintenance fees. According to GST standards, maintenance charges are exempted from GST up to Rs 7500/ per month. Scroll down to learn more about the GST maintenance charge.

Is there GST on monthly maintenance charges?

As Swapnil and Pankaj mentioned,  yes there is a GST applicable on maintenance charges. The housing society must meet the following two requirements in order to levy GST from its members on maintenance fees:

• In a fiscal year, the total of the charges imposed by your society should go above Rs 20 lakhs.

• The monthly maintenance rate for the specific flat should be more than Rs 7,500.

The society is responsible for paying GST on the excess amount if the monthly fees per residential unit are higher than Rs 7,500. 18% is the current GST rate. These could include a variety of taxes and utility payments that the housing society makes on behalf of the residents, such as municipal taxes, property taxes, water bills, energy bills for shared facilities, etc. I hope you got an understanding of GST on flat maintenance charges.