GST on apartment maintenance not new, rule exists since 2019: Tax officials

IANS April 14, 2025 275 views

The Goods and Services Tax on apartment maintenance has been a regulation since 2019, causing recent confusion among residents. Tax officials have clarified that the 18% GST applies only under specific conditions, such as monthly maintenance exceeding Rs 7,500 and annual society turnover above Rs 20 lakh. A 2021 Madras High Court ruling provided some relief by stipulating GST should be charged only on amounts above Rs 7,500. The tax department is now actively encouraging Resident Welfare Associations to ensure proper compliance with these long-standing guidelines.

"GST on maintenance charges is not a new regulation" - CBIC Official
New Delhi, April 14: Amid rising concerns and confusion among apartment residents, tax officials have clarified that the Goods and Services Tax (GST) on apartment maintenance charges is not a new rule.

Key Points

1

18% GST applies on monthly maintenance over Rs 7,500

2

Madras High Court modified original 2019 CBIC directive

3

RWAs must register if annual turnover exceeds Rs 20 lakh

4

Stricter compliance efforts now being implemented

It is an existing regulation that has been in place since 2019, they maintained.

The clarification comes as housing societies across the country witness growing panic and debate, especially on social media and in community meetings.

As per a NDTV Profit report, the Central Board of Indirect Taxes and Customs (CBIC) had, in 2019, directed that flat owners must pay 18 per cent GST on maintenance charges if the amount paid to their Resident Welfare Association (RWA) exceeds Rs 7,500 per month.

This has been a long-standing rule, but it has recently come back into the spotlight due to stricter compliance efforts by tax officials.

However, a 2021 ruling by the Madras High Court brought some relief. The court ruled that GST should be charged only on the portion of the maintenance amount that exceeds Rs 7,500 -- not on the full amount.

This ruling effectively overruled a 2019 circular issued by the CBIC and a decision by the Authority for Advance Rulings (AAR), which had stated that if the monthly charges exceeded Rs 7,500, then GST would apply on the entire amount, and not just the excess.

Importantly, the tax department has not appealed the Madras High Court judgment in any higher court so far.

This means the ruling stands, but it may not be followed uniformly across all states. Some tax authorities may still choose to go by the original CBIC interpretation, the report said.

Currently, RWAs are required to collect 18 per cent GST on monthly maintenance charges only if two specific conditions are met: the per-apartment monthly maintenance exceeds Rs 7,500, and the society’s annual turnover is more than Rs 20 lakh.

If both these conditions apply, then the housing society must register under GST and charge tax on the entire maintenance amount, it added.

The report also said that many apartment complexes in big cities are still not following this rule. As a result, the tax department is now urging RWAs to comply and ensure proper tax payments.

Reader Comments

R
Rahul K.
This is such important clarification! Our society has been debating this for weeks. Glad to know the Madras HC ruling stands - makes much more sense to tax only the amount above ₹7500. 👍
P
Priya M.
Why is there so much confusion about taxes that have existed since 2019? The government really needs to improve tax literacy campaigns. Most residents in my building had no idea about this rule!
A
Ankit S.
The article could have explained better how societies with turnover under 20L are exempt. That's crucial info for smaller housing complexes! Otherwise good reporting though.
S
Sanjana P.
Our maintenance just crossed ₹8000 last month and the RWA sent a notice about GST. This article came at the perfect time! Now I can explain the rules properly in our next meeting.
V
Vikram J.
The tax department should standardize implementation across states. It's unfair that some residents pay tax on full amount while others pay only on excess, just because of where they live.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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Tags:
GST Apartment Maintenance Tax Rules Housing Societies CBIC Madras High Court
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