GST on maintenance charges: Flat owners to pay 18 per cent on amount exceeding Rs 7500

Flat owners will be required to pay 18 percent GST on maintenance charges exceeding 75000, clarified the Finance Ministry. RWAs are required to collect GST on monthly subscription/contribution charged from its members if such payment is more than Rs 7,500 per month and the annual turnover of RWA exceeds Rs 20 lakhs by way of supply of services and goods.

“In case the charges exceed Rs 7,500 per month per member, the entire amount is taxable. If the maintenance charges are Rs 9,000 per month per member, GST at 18 percent shall be payable on the entire amount of Rs 9,000 and not on (Rs 9,000-Rs 7,500) = Rs 1,500,” said finance ministry in a circular issued to field offices on how the RWA should calculate GST payable.

While stating about how the tax liability would be calculated for a person who owns two or more flats in the housing society or residential complex, the Ministry said in such cases the ceiling of Rs 7,500 per month per member shall be applied separately, for each residential apartment owned by him.

RWAs are entitled to take input tax credit (ITC) of Goods and Services Tax (GST) paid by them on capital goods (generators, water pumps, lawn furniture, etc.), goods (taps, pipes, other sanitary/hardware fillings, etc.) and input services such as repair and maintenance services, explained the ministry.

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