GST On Maintenance Charges

See How GST Applied on Maintenance Charges

On 22 July 2019, the Government had issued Circular No.109/28/2019- GST on ‘Issues related to GST on monthly subscription/contribution charged by a Residential Welfare Association (RWA) from its members’. An RWA provides multiple services and goods for the common use of its members in a housing society or a residential complex and collects GST on maintenance charges for the same.

In this article, we will discuss the applicability of GST on Maintenance Charges with following topics:

Exempt Services

GST on society maintenance charges for maintenance paid by residents to the Resident Welfare Association* are exempt if the amount charged does not exceed INR 7,500 per month, per member (prior to  25 January 2018 the limit was INR 5,000). However, if these charges exceed INR 7,500, GST on maintenance charges of commercial building is chargeable on the entire amount charged. *Resident Welfare Association *RWA): RWA is an unincorporated body or a non--profit entity registered under any law in force.

Note: If the aggregate turnover of an RWA does not exceed INR 20 lakhs in a financial year, the RWA will not be required to take GST registration nor pay GST even if the amount of GST on commercial society maintenance charges exceeds INR 7,500 per month per member. It is the standard GST rate for Maintenance Charges and even GST on apartment maintenance common area charges.

Input Tax Credit (ITC)

Resident Welfare Associations (RWAs) are entitled to take ITC of GST paid on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services (repair and maintenance services) under GST on maintenance charges of society firmed for residential building or maintenance charges GST. Every residentail building society send GST on maintenance charges of society notification to flat owner.