Living in a closed society? Now you may have to pay 18% GST on flat maintenance; see the details here
Recently, people living in closed societies are very confused about whether the Goods and Services Tax (GST) applies to its maintenance amount. Social media messages carrying misinformation exacerbate the confusion. Read more about it here.
Recently, people living in closed residential societies are very confused about whether the Goods and Services Tax (GST) applies to its maintenance amount. Social media messages carrying misinformation exacerbate the confusion. Now, the tax authorities have clarified that the maintenance amount is not new and has been in effect since 2019.
When will GST be applicable?
According to the Central Committee of the Central Taxation and Customs (CBIC), if the donation of each apartment exceeds Rs 7,500, the housing community will need to pay GST on the entire monthly maintenance amount and the association’s annual turnover is over Rs 2 million. If none of these conditions are met, the association is exempt from payment of GST and does not require registration under the GST Act.
CBIC Statement
“If the monthly maintenance exceeds Rs 7,500 per member and the association’s total turnover exceeds Rs 20 lakh, the full amount of GST is levied, not just over the amount,” the CBIC said in a statement. This means that if your monthly plan maintenance amount is Rs 8,000, then the full amount will be levied, not just over Rs 500 above the exemption limit.
Rules may vary from state to state
GST maintenance fee rules may vary by state. For example, the Madras High Court ruled in 2021 that the threshold of Rs 7,500 must be charged at the amount collected above and above, rather than the tax collected in the entire amount. However, the ruling does not apply to societies outside Tamil Nadu.
