GST on Apartment Maintenance Charges: Exclusions & Inclusions
GST on apartment maintenance charges directly impacts residents and housing societies. If your monthly maintenance exceeds ₹7,500 and the society’s annual turnover crosses ₹20 lakh, GST may apply. Understanding the 18% GST rate, exemptions, inclusions, and compliance rules is essential for smooth apartment management. This guide explains everything apartment owners and societies need to know.
Applicability of GST on Apartment Maintenance Charges
As per the provisions of the GST Act, a co-operative housing society should be considered as a ‘person’. The applicability of this tax law does not depend on whether the society is making a profit or loss. All types of housing societies engaged in business activities are liable to pay GST. However, GST on apartment is not applicable if the annual turnover from business activities is less than Rs. 20 lakhs.
The business activities of a cooperative housing society include:
- Receipts from investments
- Income from renting of common areas
- Share transfer fee from society members
- Income from mobile towers on the premises
- Receipts from the advertisement board
- Society maintenance charges from its members
| Is GST Applicable on Apartment Maintenance Charges? If your apartment’s monthly maintenance charges go beyond ₹7,500 or the society collects more than ₹20 lakh a year, then there’s an 18% GST on Apartment Maintenance charges. This rule could affect over 50 lakh residents in Bengaluru alone, and nearly 40 lakh people living in other cities across Karnataka. There’s a common misconception that GST for Apartment Maintenance is just 5%, but the actual rate is 18%. Once a housing society registers for GST, it must file two returns every month and one annually. To find out whether GST on Apartment Maintenance applies to your society, the association can visit the Commercial Tax Office and get it checked by paying a fee of ₹500. |
Registration of Housing Societies under the GST Act
A co-operative housing society is liable to register under the GST Act once its annual turnover exceeds Rs. 20 lakhs. This requirement is stated under the provisions of Section 22. However, special category states have a limit of Rs. 10 lakhs before they are eligible to register. These states include Mizoram, Tripura, Assam, Uttarakhand, Himachal Pradesh, Nagaland, Manipur, Arunachal Pradesh, Sikkim, Meghalaya, Telangana, Jammu and Kashmir.
The new regime of GST on apartments in cooperative housing societies requires a society to register even if it has not crossed the annual turnover threshold. However, they do not need to register if they cross the limit, and each member needs to make a monthly maintenance contribution of less than Rs. 7500.
GST on Apartment Registration and New Flats
GST on new flats depends on the type of property. Affordable housing is taxed at 1%, while non-affordable housing attracts 5% GST.
GST for apartment registration applies when registering an under-construction apartment with the housing society. This tax is separate from regular maintenance charges and is generally payable before the property is handed over.
Ensuring the proper GST invoicing for housing society and the exact GST amount with the society provides clarity and avoids complications. Being aware of both GST on new flats and GST for apartment registration helps to plan the expenses efficiently.
GST on Apartment Maintenance Charges Rules and Regulations
Housing societies are responsible for collecting GST on apartment maintenance charges from residents. However, GST can be levied only after verifying specific eligibility criteria defined under GST laws.
As per the GST on Apartment Maintenance Charges Rules and Regulations, GST is applicable only when both conditions are met: the housing society’s annual turnover exceeds ₹20 lakh, and the monthly maintenance charge per apartment is more than ₹7,500. If either of these conditions is not satisfied, the maintenance charges remain exempt from GST.
GST Applicability Criteria for Apartment Maintenance Charges
While the housing society is responsible for collecting the GST on apartment maintenance charges in apartments from the respective owners, before levying the GST, the following criteria must be considered:
| Annual Turnover Limit | Monthly Maintenance Payment | Applicability of GST |
| Rs. 20 Lakh or less | More than Rs. 7500 | Exempt |
| Rs. 20 Lakh or less | Less than or equal to Rs. 7500 | Exempt |
| More than Rs. 20 Lakh | More than Rs. 7500 | Applicable |
| More than Rs. 20 Lakh | Less than or equal to Rs. 7500 | Exempt |
GST on Apartment Maintenance Charges: Inclusions and Exclusions
The GST law imposes specific rules for co-operative housing societies. It states what is included and excluded from its applicability. Therefore, it is important to analyse the taxation of common services supplied to society members and perform an accurate GST calculation for apartments.
Here are the inclusions and exclusions of expenses for co-operative housing societies under the GST Act:
Inclusions
1. Maintenance Charges above Rs. 7500
GST on Maintenance Charges in apartments is imposed on services like cleaning, security, maintenance, and other community amenities. When the monthly maintenance charge exceeds ₹7,500, the society becomes liable to pay 18% GST for Apartment Maintenance above ₹7,500.
2. Other Services and Goods
All other incomes derived by the housing society from services or goods are liable to GST on apartments. These services include renting common spaces and advertisement spaces, and exclude maintenance services. Furthermore, the supply of services to a person and leasing the premises for mobile towers are also subject to GST.
3. Input Tax Credit (ITC)
Cooperative housing societies are eligible to claim Input Tax Credit on goods and services. For instance, the society can include repairs, constructions, or purchases on the list for ITC services. These services are defined under the taxable income of the society.
4. Annual Membership Fees
If societies charge annual membership renewal fees and the total annual turnover crosses the amount of Rs. 20 Lakhs, then GST is attracted.
5. Property Tax
The payment of property tax attracts GST on apartments. The government does not consider a property tax payment as subject to GST.
6. Non-occupancy Charges
This charge is not considered to be a part of the property tax for common areas in housing societies. So, it is considered under GST on apartments of housing societies.
Exclusions
1. Maintenance Charges Below Rs. 7,500
If the monthly maintenance charges recovered from members are less than Rs. 7,500, then these charges are not liable under GST for apartment maintenance. Smaller societies with lower expenses can use this provision to reduce their tax burdens.
2. Water and Electricity Charges
GST excludes collection made for the provision of necessities such as water, electricity, and property taxes. Furthermore, utility providers and local authorities exempt these services.
3. Contribution to Sinking Fund
The contributions which members pay towards the sinking fund are outside GST. The society makes payments for future repairs or replacement of its property. These services are not considered taxable under GST provisions and are therefore excluded.
4. Share Transfer Fees
The sale of property in a cooperative housing society is not considered a taxable service. Hence, it is not charged under the GST on apartments.
Also Check: Supreme Court Judgement on Apartment Maintenance Charges
Statutory Compliance of Co-operative Housing Society Under GST
Co-operative housing societies need to follow certain statutory compliance under the GST scheme. Here are some of the compliance regulations of GST on housing societies:
1. Returns
A society needs to file GST returns monthly using forms GSTR-1, GSTR-2, and GSTR-3. These returns include details of sales and taxes paid on outward and inward supplies. If you fail to file returns on time, fines and penalties may be imposed.
2. Applicability of Maintenance Charges
The monthly maintenance charges should exceed Rs. 7500 for the applicability of GST on the housing society. However, if it is below this limit, then the society is exempt. Hence, it becomes mandatory to continuously monitor the collections of maintenance charges in a society.
3. Invoices
Collecting GST for apartment maintenance requires the housing society to change the invoice format of bills payable. The GSTIN number, amount of tax counted, and other details need to be mentioned in the invoice. Otherwise, it will be termed as non-compliance with GST provisions and attract fines and penalties.
4. Books of Accounts
The housing society should prepare and maintain proper books of accounts. It is mandatory for compliance with GST laws and tax audits. Once the threshold limit is exceeded, the housing society’s books of accounts will be audited.
Also Check: FAQ on GST on Housing Society
Apartment Management by NoBrokerHood
NoBrokerHood makes everyday apartment management simple for both residents and housing societies. It helps with collecting maintenance, handling complaints, and managing shared spaces, while also taking care of financial tasks like GST on maintenance. By keeping payments and records organised, NoBrokerHood reduces administrative hassles and ensures smooth communication between residents and the society committee.
| Area of Apartment Management | How NoBrokerHood Helps |
| Maintenance Collection | Automates maintenance billing, online payments, and timely reminders for residents. |
| GST Calculation on Maintenance | Automatically applies GST on maintenance charges as per GST rules and exemption limits. |
| GST-Compliant Invoicing | Generates proper GST invoices with breakup of CGST and SGST for residents. |
| Financial Record Management | Maintains organised digital records of payments, invoices, and GST collections. |
| GST Reporting Support | Helps societies track GST collected and prepare data required for GST returns. |
| Expense & Accounting Management | Records expenses, vendor payments, and maintenance costs in one dashboard. |
| Input Tax Credit (ITC) Tracking | Supports tracking of GST paid on vendor services for ITC eligibility. |
| Complaint Management | Allows residents to raise complaints digitally and track resolution status. |
| Communication & Announcements | Enables instant communication between residents and the society committee. |
| Facility & Amenity Management | Manages booking of common areas like clubhouse, gym, and halls. |
| Audit & Transparency | Provides clear financial visibility for audits and committee reviews. |
| Document Management | Securely stores GST invoices, financial reports, and society documents. |
All Solutions by NoBrokerHood:
Summary
To sum up, it is necessary to follow GST laws for some of the services and transactions by the cooperative housing societies. Several mitigating factors alleviate the tax burden on several essential services and smaller societies. Those provisions make sure there is proper control of societies’ finances and that such societies will not encounter too many taxes. GST on apartments is based on strict statutory compliance with regulations. If there is non-compliance, then it will attract penalties and fines from the housing society.
FAQs
The standard rate of GST is 1% on affordable housing and 5% on non-affordable housing. This amount, however, is levied on the purchase of real estate property.
A housing society is an individual or entity that develops affordable housing for families. It also develops plots and provides for building houses.
All co-operative housing societies need GST registration even if they are not eligible. This change was applicable under the new GST regime.
The maintenance services of co-operative housing societies, which are eligible for ITC, include housekeeping, security, lift maintenance, fire, accounting and auditing, and fire.
GST for an apartment association or housing society is required when the total annual turnover crosses Rs. 20 lakhs. However, for special category states like Mizoram, Tripura, Assam, Uttarakhand, Himachal Pradesh, Nagaland, Manipur, Arunachal Pradesh, Sikkim, Meghalaya, Telangana, Jammu and Kashmir, the limit is Rs. 10 lakhs.
All cooperative housing societies need to pay the applicable amount of GST. The housing societies pay GST at a rate of 18%, with a rate of 9% for the central tax and 9% for the state tax.
You can avoid GST on apartments by purchasing ready-to-move flats in India, as these properties are not subject to GST on new flats.