No GST on maintenance charges of housing societies below this Specified Limit

The issue of GST on housing society maintenance charges has sparked confusion among housing societies (similarly known as resident welfare associations or RWAs) and apartment owners across India, especially regarding the application of the Rs 7,500 threshold, i.e., whether GST would be charged on the entire amount or excess amount of Rs 7,500.

What Is Apartment Maintenance?

Maintenance for apartments is the amount that apartment owners pay to their housing societies regularly. These charges are used to upkeep the housing society, for example, the common area, gym and lobby cleaning expenses, security guards, water bills, maintenance of lifts and minor repairs. 

Applicability of GST on Apartment Maintenance

Prior to deciding whether GST applies to apartment maintenance, it is important to note that housing societies are regarded as "persons" under the GST Act, regardless of which state cooperative society act they are registered under. 

Since the housing society charges monthly fees to its residents or members, any services provided by the housing society are considered to be a supply in the course or furtherance of business. Accordingly, the services provided by a housing society are actively covered under GST, subject to certain thresholds discussed below.

As per clarification issued by the GST Council and Circular. GST shall only apply to a housing society when its annual turnover for the financial year exceeds Rs.20 lakhs and monthly maintenance charges per member are more than Rs.7,500.

So, even if monthly maintenance per member is above Rs.7,500 while the housing society's annual turnover is less than Rs.20 lakhs, GST shall not be applicable. 

It is also essential to note that if monthly maintenance is below Rs.7,500, GST will not be applicable, irrespective of the housing society's annual turnover.

An interesting question to consider here is whether the exemption limit will be applied per person or apartment if a person owns two or more apartments in a housing society. In this case, the GST department has clarified that if a member pays maintenance charges for each apartment separately, then the exemption limit of Rs.7,500 shall be applied per apartment.

GST Rate on Apartment Maintenance

The GST rate for apartment maintenance is 18%, which will be applied when monthly maintenance is more than Rs.7,500. For instance, if monthly maintenance is Rs.10,000, GST shall be Rs.1,800 (18% of 10,000).