GST on Housing Society Maintenance Charges: Key Information for Apartment Owners

GST on Maintenance Charges by Housing Societies (RWAs)

GST Applicability (As per Notification No. 12/2017-Central Tax (Rate))

As per Entry 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended), maintenance charges collected by a Residents’ Welfare Association (RWA) are exempt from GST if:

  1. The monthly contribution per member does not exceed ₹7,500, and
  2. The RWA’s aggregate turnover is below ₹20 lakhs annually.

🔴 If both conditions are not met, then GST @18% becomes applicable on the entire amount, not just the portion exceeding ₹7,500.
Reference: Notification No. 12/2017-Central Tax (Rate) Entry 77.

Clarification by CBIC

The CBIC had clarified via a press release and earlier circulars (e.g., Circular No. 109/28/2019-GST) that:

  • Exemption is lost entirely if the contribution per member exceeds ₹7,500, even by a small amount.
  • If either condition (monthly per-member limit or annual turnover) is breached, GST applies on the full maintenance amount.

Judicial Update: Kerala High Court (April 2025 Ruling)

The Kerala High Court has struck down the 2021 GST amendment that deemed transactions between clubs/associations and their members as “supply”.

  • The Court upheld the principle of mutuality, referring to the earlier Supreme Court ruling in the Calcutta Club case, and held that members and associations are not distinct persons under the Constitution.
  • As such, such internal transactions cannot be treated as ‘supply’ for GST purposes.

⚠️ However, this is a High Court decision and may not be final nationwide. CBIC may challenge this in the Supreme Court, and till then, GST officers may continue levying GST unless explicitly stayed pan-India.

Practical Takeaways for Apartment Owners / RWAs

  • If monthly maintenance per flat is ≤ ₹7,500 and total turnover is < ₹20 lakh, no GST is applicable.
  • If any one of the above thresholds is breached, GST @18% is applicable on the full amount.
  • High Court ruling creates a potential defense, but RWAs should await Supreme Court clarity before stopping GST collection on this basis.