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News Date: July 23, 2019, 4:56 pm

Flat maintenance charges of over Rs 7,500 to incur 18% GST

The ministry clarified the ceiling of Rs 7,500 per month per member shall be applied separately for those who own two or more flats in a housing society or residential complex. 

“Prior to January 25, 2018, the exemption was available if the charges or share of contribution did not exceed Rs 5,000 per month per member. The limit was increased to Rs 7,500 per month per member with effect from January 25,” the ministry said. 

It said in case the charges exceed Rs 7,500 per month per member, the entire amount is taxable. “For example, if the maintenance charges are Rs 9,000 per month per member, GST at the rate of 18% shall be payable on the entire amount of Rs 9,000 and not on Rs 1,500 (Rs 9,000-Rs 7,500),” the ministry said in a clarification to its field officers. 

It also said if the aggregate turnover of an RWA does not exceed Rs 20 lakh in a financial year, it shall not be required to take registration and pay GST even if the maintenance charges exceed Rs 7,500 per month per member. 

“This clarification is contradictory to the tax position adopted by many residential associations. Tax on the entire consideration would typically entail an increased cost of maintenance for residents,” said Abhishek Jain, tax partner at consulting firm EY India. 

The ministry also clarified the ceiling of Rs 7,500 per month per member shall be applicable separately for those who own two or more flats in a housing society or residential complex. 

Source : economics times

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