New GST on Maintenance Charges: What’s Changing?

Apartment owners who pay more than Rs 7,500 in monthly maintenance charges could soon see a rise in their expenses due to an 18% Goods and Services Tax (GST) applied to the full amount. This move comes as part of new guidelines for housing societies (RWAs) with annual turnovers exceeding Rs 20 lakh. If you’re paying more than Rs 7,500 a month in maintenance, the GST will apply to the entire amount, not just the portion exceeding Rs 7,500.

How the GST Affects Your Monthly Bill

If your maintenance charge is Rs 9,000 per month and your housing society’s annual turnover exceeds Rs 20 lakh, you’ll now face an additional Rs 1,620 as GST. This means your new total monthly maintenance bill will be Rs 10,620, including the GST. It’s important for apartment owners to understand how this tax applies and how it could affect their finances.

Government Clarifications on GST for RWAs

The Ministry of Finance has clarified that housing societies with an annual turnover of less than Rs 20 lakh won’t need to register for GST, even if maintenance charges exceed Rs 7,500 per month. Additionally, RWAs can claim input tax credit (ITC) on GST paid for capital goods (like generators or water pumps), goods (such as pipes and sanitary items), and input services (like repair and maintenance services).

If you own multiple flats in a society, the Rs 7,500 limit applies separately to each apartment. This means that if you own two flats, each with a maintenance charge over Rs 7,500, the GST will be calculated separately for each one.

What Should Apartment Owners Do?

Experts suggest that residents review their RWA’s GST registration status, check the housing society’s annual turnover, and see if the input tax credit can be passed on to the residents. This could potentially lower the overall maintenance costs for homeowners, depending on the situation.