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If a housing society’s annual turnover exceeds Rs 20 lakh and an individual flat owner pays over Rs 7,500 per month as maintenance, then 18% GST becomes applicable on the full maintenance amount, not just the amount exceeding Rs 7,500.
The government also clarified that RWAs registered under GST can avail input tax credit on goods and services used for providing maintenance services to members. (Representative Image)
Apartment owners who pay more than Rs 7,500 per month in maintenance charges may now see their monthly expenses rise further due to an 18 per cent goods and services tax (GST) on the entire amount, according to reports.
If a housing society’s (RWA) annual turnover exceeds Rs 20 lakh and an individual flat owner pays more than Rs 7,500 per month as maintenance, then 18% GST becomes applicable on the full maintenance amount, not just the amount exceeding Rs 7,500, according to The New Indian Express.
In its 25th meeting in January 2018, the GST Council had enhanced the exemption limit from the initial Rs 5,000 to Rs 7,500 per month to benefit RWAs and housing societies.
Here’s How It Works
If you’re paying Rs 9,000 per month for maintenance and your society’s annual turnover is above Rs 20 lakh, you’ll now be charged an additional Rs 1,620 as GST, bringing your total monthly bill to Rs 10,620.
What Ministry Says
According to The New Indian Express, the office of Director General (M&C), Press Relations & Information Division, Ministry of Finance & Corporate Affairs, has clarified that if the aggregate turnover of an RWA does not exceed Rs 20 lakh in a financial year, it shall not be required to take registration and pay GST even if the amount of maintenance charges exceeds Rs 7,500 per month per member.
The ministry further clarified that RWAs are entitled to take input tax credit (ITC) of Goods and Services Tax (GST) paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services.
On how the tax liability would be calculated for a person who owns two or more flats in the housing society or residential complex, the ministry said in such cases the ceiling of Rs 7500 per month per member shall be applied separately for each residential apartment owned by him.
What Should Residents Do?
According to experts, residents should check if their RWA is registered under GST, review annual turnover figures of their housing society, and discuss with RWAs whether input tax credit benefits can be passed on to the residents.
