Is 18% GST levied on maintenance amount when housing society is managed by builder?
If you are living in a housing society, then you need to pay an amount of fee as maintenance for the upkeep of the buildings and common area. If the apartment is managed by RWA and Registered Society then then there is no requirement to pay Goods and Services Tax (GST) on maintenance fee by the residents if monthly amount is below the specified threshold. However, in many housing societies it takes time for RWA or Registered Society to be formed and in this situation, GST is applicable if the housing society is still managed by the builder. How much will GST be charged and who will pay it is the question.
Let us understand in detail how GST will be applied in different scenarios depending upon the amount of maintenance and who is managing the housing society.
When is GST to be paid by homeowners for paying maintenance to housing society or RWA?
It is only if the RWA or housing society’s aggregate turnover is over Rs 20 lakh (10 lakh in few states) and you pay a maintenance amount of more than Rs 7,500 per month per unit of the flat, then you need to pay GST on such maintenance amount. Both conditions (20 lakh and more than Rs 7500) must be satisfied together, for levying GST on maintenance expenses.
Sanjay Chhabria, Indirect Tax Lead, Nexdigm, says “If individual contribution per member per month is Rs 7500 or less, no GST is charged even if the society is GST registered. The exemption under Notification No. 12/2017 – Central Tax (Rate) applies.”
