GST Applicability on Apartment Association Maintenance Charges

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GST on Apartment Associations: What You Need to Know

On July 28, 2025, Finance Minister Nirmala Sitharaman provided a clear explanation in Parliament regarding the applicability of Goods and Services Tax (GST) on Apartment Associations or Resident Welfare Associations (RWAs). The clarification addresses both registration requirements and taxability of maintenance charges.

1. When is GST Registration Required?

Legal Provision:
As per Section 22(1) of the CGST Act, 2017, every supplier is required to register under GST if their aggregate turnover exceeds ₹20 lakhs (₹10 lakhs in special category states) in a financial year.

Impact on Apartment Associations:

  • If total turnover (including maintenance collections) exceeds the threshold, the RWA must register under GST.
  • If turnover is below the threshold, no registration is required.

2. When Are Maintenance Charges Taxable?

Relevant Notification:
As per Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended:

Services provided by an RWA to its members are exempt from GST if the monthly maintenance charge does not exceed ₹7,500 per member.

Key Points:

  • If charges ≤ ₹7,500/month per member → GST is not applicable.
  • If charges > ₹7,500/month per member → GST is applicable on the full amount, not just the excess.

GST Rate:
The applicable GST rate is 18% (9% CGST + 9% SGST) under Heading 9995 of Notification No. 11/2017 – Central Tax (Rate).

3. Do Residents Have GST Obligations?

Clarification by Finance Minister:

  • Residents have no GST compliance responsibility.
  • GST is payable only by the apartment association, being the supplier of service as per Section 7 of CGST Act, 2017.

4. Historical Context: Exemption Limit Raised

Initially, the exemption was ₹5,000/month per member.
This was increased to ₹7,500 in the 25th GST Council Meeting held on 18th January 2018, based on council recommendations.

5. Relief on Penalties for Late GST Payment

Voluntary Payment Option:
If any tax has not been paid, taxpayers can avail the benefit of reduced or no penalty by paying dues within the specified time, as per Sections 73 & 74 of CGST Act, 2017.

Quick Summary Table

ParticularsGST Applicability
Maintenance charges ≤ ₹7,500 per member/month✅ Exempt from GST
Maintenance charges > ₹7,500 per member/month❌ Fully Taxable @18%
Total turnover ≤ ₹20 lakh (₹10 lakh for special states)✅ Registration Not Required
Total turnover > ₹20 lakh❌ Registration Mandatory

Important Note: Where maintenance exceeds the exemption threshold and turnover crosses the registration limit, GST registration and compliance becomes mandatory, even if the apartment association operates on a non-profit basis.

RWAs must monitor both the per-member maintenance amount and total turnover to determine GST applicability.

No GST-related document or declaration is required from individual residents.