GST on Society Maintenance: Key Criteria and Implications

In India, Goods and Services Tax (GST) is applicable to various services, including those provided by Resident Welfare Associations (RWAs) or housing societies. Homeowners contributing monthly maintenance charges may be subject to GST under specific conditions.​

For residents living in apartment complexes or cooperative housing societies in India, monthly maintenance charges are a routine expense. However, many may not realize that these charges can also attract Goods and Services Tax (GST) under certain conditions. Recent clarifications by tax authorities shed light on when GST becomes applicable and how residents might avoid it.

GST Applicability Criteria

According to the Finance Ministry’s guidelines, GST at 18% is applicable if:​

1. Monthly Maintenance Charges Exceed ₹7,500: If a homeowner pays more than ₹7,500 per month as maintenance charges to the RWA or housing society, GST becomes applicable on the entire amount, not just the excess over ₹7,500. ​
2. Annual Turnover of RWA Exceeds ₹20 Lakh: The RWA’s aggregate turnover from supplying services and goods must exceed ₹20 lakh in a financial year for GST to apply. ​

For example, if a society collects ₹10 lakh annually but temporarily increases collections due to major repairs—say, to ₹21 lakh—it crosses the threshold for GST registration. Once registered, the society must comply with GST norms even if future collections dip below the limit, unless they formally cancel their GST registration.

However, there are situations where GST can be avoided. If a housing society’s monthly maintenance charges per member remain at ₹7,500 or below, no GST is payable—even if its total collection exceeds ₹20 lakh. This rule provides flexibility for societies that wish to stay outside the GST net by maintaining charges below the threshold.

Tax experts also caution that once a society takes GST registration, it must follow all GST compliance measures annually. This includes filing returns and maintaining detailed records of collections and expenditures.

For residents, it’s important to understand these criteria and consult their RWA or a tax advisor. Those who own multiple flats in the same society could potentially face GST separately on each unit, depending on how the charges are structured.

Implications for Homeowners

For homeowners, this means that if both conditions are met—monthly maintenance charges above ₹7,500 and RWA’s annual turnover exceeding ₹20 lakh—they are liable to pay GST at 18% on the full maintenance amount.​

Exemptions and Clarifications

It’s important to note that if the monthly maintenance charge is ₹7,500 or less, no GST is applicable, regardless of the RWA’s annual turnover. Additionally, RWAs are entitled to claim Input Tax Credit (ITC) for GST paid on capital goods and services used for common areas, such as lifts, generators, and maintenance services. ​

Conclusion

Homeowners should be aware of these GST provisions to understand their tax liabilities. It’s advisable to consult with the RWA or a tax professional for clarity on specific situations and to ensure compliance with GST regulations.