Now 18% GST Will Be Charged on Full Maintenance Amount If It Exceeds ₹7,500 – Know How Your Monthly Expenses Will Rise

If you live in an apartment and pay more than ₹7,500 per month as maintenance charges, your monthly expenses may soon increase. The reason is a new GST rule under which 18% Goods and Services Tax (GST) will now be applicable on the entire maintenance amount, not just the portion exceeding ₹7,500. This applies to all housing societies whose annual turnover exceeds ₹20 lakh.

Why is this rule important?
Because thousands of apartment owners across India could now face a sudden rise in their monthly bills. Let’s understand in simple terms what this rule is, how it works, and what you should do about it.

Now 18% GST Will Be Charged on Full Maintenance Amount If It Exceeds ₹7,500 – Know How Your Monthly Expenses Will Rise

What Is the New Rule?

According to reports, if a housing society’s annual turnover is more than ₹20 lakh and an individual flat owner pays more than ₹7,500 per month in maintenance, then 18% GST will be applicable on the entire amount.

Note: Earlier, GST was charged only on the portion exceeding ₹7,500. Now, it will be charged on the full amount.

Let’s Understand with an Example

Suppose:

  • Your housing society's annual turnover is ₹25 lakh.

  • You pay ₹9,000 per month as maintenance charges.

Now, you will be required to pay 18% GST on ₹9,000.

Calculation:
18% of ₹9,000 = ₹1,620
Your total monthly maintenance charge = ₹9,000 + ₹1,620 = ₹10,620 per month

Background of This Rule

  • In January 2018, the GST Council increased the exemption limit for maintenance charges from ₹5,000 to ₹7,500 per month.

  • The goal was to provide relief to small and medium housing societies and their members.

But now, due to rising turnovers and stricter tax compliance, this new rule is becoming relevant again.

What the Ministry Has Clarified

According to The New Indian Express, the Press Information Bureau of the Ministry of Finance has clarified:

  • If an RWA (Residents Welfare Association) has an annual turnover less than ₹20 lakh, it is not required to register under GST or charge GST from members, even if maintenance charges exceed ₹7,500 per month per member.

However, if the turnover is above ₹20 lakh, and:

  • A member pays more than ₹7,500 per month, then 18% GST will be applicable on the full amount.

Do RWAs Get Any Benefit?

Yes, RWAs can claim certain benefits:

  • They are eligible for Input Tax Credit (ITC).

  • This means they can claim GST paid on capital goods (like generators, water pumps, lawn furniture), goods (pipes, taps, sanitary items), and services (repairs, maintenance, etc.).

What If You Own More Than One Flat?

The ministry also clarified:

  • If a person owns two or more flats in the same housing society, then the ₹7,500 exemption limit will be applied separately for each apartment.

  • In other words, each flat is treated individually for GST calculation.

What Should Residents Do Now?

This rule might impact your monthly budget. Here are steps residents should take:

1. Check with Your RWA:

  • Is your housing society registered under GST?

  • Is its annual turnover above ₹20 lakh?

2. Review Your Maintenance Charges:

  • If you’re paying more than ₹7,500/month, GST may apply on the entire amount.

3. Ask About Input Tax Credit:

  • Discuss with your RWA if the benefits of ITC are being passed on to residents.

4. Reassess Your Monthly Budget:

  • If your maintenance bill is rising, adjust your financial plans accordingly.

Is This GST Rule Fair?

Experts have mixed opinions about this rule.

Positive Aspects:

  • It increases the government’s tax collection, helping fund public services.

  • ITC benefits encourage transparency and better financial practices by RWAs.

Negative Aspects:

  • It puts an additional burden on middle-class and lower middle-class families.

  • Monthly expenses rise, especially in urban areas with already high living costs.

  • RWAs have to deal with more complex accounting and tax filing requirements.

Conclusion

This new GST rule is crucial for all apartment owners who pay more than ₹7,500/month in maintenance and live in societies with annual turnover above ₹20 lakh. Under the new guidelines, your total monthly cost may go up by 18% of the full maintenance amount.

To avoid unnecessary financial strain:

  • Stay informed

  • Communicate with your RWA

  • Understand whether your society falls under GST norms

  • Ask how ITC benefits are being used

Smart financial planning and awareness can help you manage your monthly costs more effectively.

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