If you pay more than ₹7,500 per month as maintenance charges for your apartment, you should pay more tax now than before.
Tamil Nadu Authority for Advance Ruling (AAR) had recently issued a notification on the lack of clarity about the amount on which GST (Goods and Service Tax) applicable on maintenance charges– the whole amount collected or just the amount exceeding ₹7,500.
It has been held that if the amount collected by a registered housing society or a resident welfare association (RWA) exceeds ₹7,500 per month per flat, then GST of 18 per cent is applicable on the entire amount and not on the difference amount.
However, GST is exempted if the annual aggregate turnover of the resident welfare association is not more than ₹20 lakh. In other words, GST is invoked only on the satisfaction of both the conditions – member’s contribution exceeds ₹7,500 per month and the annual aggregate turnover of the RWA crosses ₹20 lakh per annum.
It was further clarified that a person who owns two or more residential apartments in a housing society or a residential complex will be construed as a member of the RWA for each residential apartment separately. That is, the ceiling of ₹7500 per month per member will be applied separately for each residential apartment.
For example, if a person owns two residential apartments in a residential complex and pays ₹12,000 per month towards maintenance charges to the RWA (₹6000 per month in respect of each residential apartment), the exemption from GST is available to each apartment.
RWAs are entitled to take Input Tax Credit of GST paid by them on input goods and services such as generators, water pumps, lawn furniture, taps, pipes, other sanitary/hardware fittings and repair and maintenance services.