RWAs Urge GST Council to Scrap 18% Tax on Maintenance Charges, Cite Rising Burden on Residents
Several Resident Welfare Associations (RWAs) across Hyderabad’s growing residential hubs have stepped up their demand for relief from the 18% Goods and Services Tax (GST) levied on maintenance charges. Prominent bodies such as the Federation of Gated Communities, Cyberabad, the Tellapur Neighbourhood Association, and the United Federation of RWAs (UFRWAs) have jointly submitted a representation to the GST Council in New Delhi, seeking a complete exemption.
Table of Contents
- Rising Costs Push RWAs Into GST Net
- “No Profit, No Loss” Bodies Should Not Be Taxed
- Concerns Over Double Taxation
- Impact on Large Residential Clusters
- Campaign Gains Momentum
- Call for Policy Reconsideration
Rising Costs Push RWAs Into GST Net
In their submission, RWAs highlighted that escalating living costs and increasing operational expenses have forced many housing societies to cross the GST applicability threshold. Under current rules, societies with annual collections exceeding Rs.20 lakh are required to levy GST on maintenance charges billed to residents.
According to the associations, this threshold is now routinely breached due to inflationary pressures and the scale of modern gated communities, thereby bringing a large number of RWAs under the tax ambit.
“No Profit, No Loss” Bodies Should Not Be Taxed
RWAs have strongly argued that they are non-profit, community-led entities that operate strictly on a “no profit, no loss” basis. Their primary role is to manage essential services such as security, housekeeping, water supply, and upkeep of common infrastructure.
They contend that applying GST to such activities is unjustified, as these are not commercial transactions but collective arrangements among residents to meet shared expenses.
“Residents are essentially pooling their own money for basic services like cleaning and security. Treating this as a taxable commercial activity is not appropriate,” said Sai Ravi Shankar, President of the Federation of Gated Communities, Cyberabad.
Source : https://www.jurishour.in/gst/rwa-gst-council-scrap-tax-maintenance-charges-burden-residents/
