GST On Apartment Maintenance Is Not A New Levy, Clarify Tax Officials
Apr 14, 2025
Tax authorities in other states may choose not to follow Madras High Court’s 2021 interpretation
Amid growing confusion and concern among apartment residents, official sources clarified that the Goods and Services Tax (GST) on apartment maintenance charges is not a new levy, but an existing regulation that has been in place since 2019.
The clarification comes in response to widespread panic and speculation on social media and in housing society meetings, especially after renewed focus on the rule due to increasing compliance efforts by tax officials.
In 2019, the Central Board of Indirect Taxes and Customs or CBIC mandated flat owners to pay 18% GST if their monthly payments to the Resident Welfare Association are more than Rs 7,500.
However in 2021, the Madras High judgment effectively set aside a 2019 circular from the CBIC ruled that GST will apply only to the portion of monthly maintenance charges that exceeds Rs 7,500 — not on the entire amount.
The High Court also set aside a 2019 ruling by the Authority for Advance Rulings (AAR), which had stated that tax exemption was allowed only if the contribution did not exceed Rs 7,500. According to the AAR, if the contribution exceeded Rs 7,500, the entire amount would become taxable, and no exemption would be available.
Notably, the tax department is yet to appeal the said order in a higher court, and tax authorities in other states may choose not to follow the Madras High Court’s interpretation.
So far, housing societies or Resident Welfare Associations are liable to pay 18% GST on monthly maintenance charges only if two conditions are met. One, the monthly maintenance per apartment exceeds Rs 7,500, second, the annual turnover of the society exceeds Rs 20 lakh.
“If both conditions are met, the society has to register under GST and charge tax on the entire maintenance amount, not just the amount exceeding Rs 7,500,” official stated the current stance.
The tax department has observed that many apartments in Tier-1 cities are not compliant, and is hence trying to nudge them to pay taxes.
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