GST on Maintenance Charges in Housing Societies
If you live in a gated society or apartment complex, you probably pay monthly maintenance fees. But have you noticed GST on the invoice? That’s because gst on maintenance charges applies under certain conditions. This blog explains when GST is charged, who must pay it, and how much.
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Are Maintenance Charges Taxable Under GST?
Yes, but only when certain criteria are met. The Goods and Services Tax (GST) is applicable on maintenance or service charges collected by:
- Resident Welfare Associations (RWAs)
- Housing societies or cooperative societies
- Builders during possession or handover
However, GST is not charged in every case. Let’s understand the conditions.
GST Applicability: When Is It Charged?
| Condition | GST Applicable? |
|---|---|
| Monthly maintenance per member ≤ ₹7,500 | No |
| Monthly maintenance per member > ₹7,500 | Yes @18% |
| Annual turnover of RWA/society < ₹20 lakhs | No |
| Annual turnover of RWA/society > ₹20 lakhs | Yes |
So, gst on society maintenance is charged only when both these apply: monthly contribution exceeds ₹7,500 and the society’s turnover exceeds ₹20 lakhs.
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GST on Society Maintenance Charges: Rate and Details
| Type of Charge | GST Rate | HSN/SAC Code |
|---|---|---|
| General maintenance charges | 18% | 9995 |
| Security, cleaning, upkeep | 18% | 9995 |
| Repairs, plumbing, civil work | 18% | 9954 |
| Water, electricity (charged at cost) | Exempt | – |
The gst on maintenance charges by builder is also 18% before handover, while utility reimbursements remain exempt.
GST on Building Maintenance Charges: Examples
Let’s say your monthly bill includes:
- ₹8,000 as maintenance
- ₹1,000 for water supply (actuals)
Total payable = ₹9,000
In this case:
- GST @18% is charged only on ₹8,000 = ₹1,440
- Total invoice = ₹10,440
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Input Tax Credit for RWAs or Builders
- RWAs: Cannot claim ITC as they don’t supply taxable goods or services
- Builders: May claim ITC during possession phase if maintenance charges are billed
Always maintain GST-compliant records to claim Input Tax Credit when eligible.
Conclusion
Understanding the gst on maintenance charges ensures transparency for homeowners and compliance for housing societies and developers. Always check your bill for accurate breakup and GST application.
I am a Chartered Accountant with more than five years of experience in the accounting field. My areas of expertise include GST, income tax, and audits. I am passionate about sharing knowledge through blogs and articles, as I believe that learning is a lifelong journey. My goal is to provide valuable insights and simplify financial matters for individuals and business owners alike.
Frequently Asked Questions (FAQs)
- When is GST applicable on housing society maintenance?When maintenance per unit exceeds ₹7,500/month and society turnover is above ₹20 lakhs/year.
- What is the GST rate on society maintenance?The GST on society maintenance is 18%, under SAC 9995.
- Do I have to pay GST on water and electricity collected by society?No, if charged at actual cost without markup, they are exempt from GST.
- Is GST applicable on maintenance collected by builder?Yes. GST on maintenance charges by builder is 18%, especially during the pre-handover phase.
- Can the housing society claim Input Tax Credit?Generally no, as RWAs are not involved in commercial activity.
