GST on society maintenance charges.

Whether GST applies to what a housing society collects depends on two numbers: what each member pays every month, and the society's turnover for the year. This guide explains both in plain words, with examples.

The limits and the rate

CBIC Circular 109/28/2019-GST explains how GST applies to resident welfare associations and housing societies that collect maintenance charges from their members. Two numbers decide the outcome. ₹7,500 per member each month. Maintenance charges up to ₹7,500 per member per month, collected to pay for common services such as security, housekeeping and repairs, are exempt from GST. ₹20 lakh of turnover in a year. A society whose total turnover for the year is up to ₹20 lakh does not need to register for GST. 18% when GST applies. Where GST is payable, the rate on maintenance charges is 18%.

Find your society's case

Turnover up to ₹20 lakh for the year. No GST registration is needed, whatever each member pays. Turnover above ₹20 lakh, and each member pays ₹7,500 or less a month. The circular treats the maintenance charges as exempt. Ask your accountant how any other receipts, such as hall hire, are treated. Turnover above ₹20 lakh, and a member pays more than ₹7,500 a month. The circular says GST at 18% applies on the full amount, not only on the part above ₹7,500. Some commentators dispute this reading, so take advice before you decide.

Worked examples

These examples count only maintenance collections and treat each flat as one member. A society's turnover can include other receipts, and a member who owns more than one flat should ask how the limit applies, so ask your accountant to confirm the figures for your year. 40 flats at ₹2,000 a month. Yearly maintenance is ₹9.6 lakh, which is below the ₹20 lakh limit. No GST registration is needed. 120 flats at ₹3,000 a month. Yearly maintenance is ₹43.2 lakh, which is above ₹20 lakh. Each member pays less than ₹7,500, so the maintenance charges are exempt. 60 flats at ₹9,000 a month. Yearly maintenance is ₹64.8 lakh and each member pays more than ₹7,500. Under the circular, 18% GST applies to the whole ₹9,000, which is ₹1,620 a month for each member, and the society should confirm its registration position with its accountant.

What to confirm with your chartered accountant

Which charges count towards the ₹7,500. Maintenance bills often include several heads. Ask which of them count as the monthly contribution per member. How turnover is counted. Ask which receipts count towards turnover, and for the figure for the whole year. Full amount or only the excess. The circular's reading is that the whole amount is taxable once a member crosses ₹7,500. Ask whether your accountant agrees, and how societies like yours are treating it.

Where ResiPass fits

ResiPass is in final testing before launch. Its accounting is designed to keep the ledger, vouchers and bank reconciliation a treasurer needs, and to produce GST-ready invoices. It does not decide whether GST applies to your society. That is a question for your chartered accountant.

Questions

Does a small society need GST registration?

Not if its turnover for the year is up to ₹20 lakh, according to CBIC Circular 109/28/2019-GST. Confirm your own figures with your accountant.

Is the ₹7,500 limit per flat or per society?

It is per member, per month. The society's total does not matter for this limit, but it does for the ₹20 lakh turnover limit.

What GST rate applies to maintenance charges?

Where GST applies, the rate is 18%.

Is this tax advice?

No. This guide explains a published circular in plain words. Rules and how they are read can change, so confirm with a chartered accountant before you act.