What will be the impacts of Goods and Services Tax which is paid by the housing societies on the maintenance charges? We examine on what are the components and when will GST be applicable.
When Can GST Be Applicable To The Maintenance Charges?
If the maintenance charges that were levied by the housing society in a financial year exceeded Rs 10 lakhs then the maintenance charges were subjected to the duty of the service tax. This highest limit has been raised up to Rs 20 lakhs under the GST. So now if the aggregate charges during a financial year exceed Rs 20 lakhs then the housing society have to collect GST from its members. Therefore, the society has to obtain a registration under the GST for this resolution.
However, if the maintenance charges for a flat do not exceed Rs 60,000 per anum then the society cannot levy GST even it has obtained a registration.
So if the aggregate charges which are levied by the housing society are less than Rs 20 lakh in a year then it need not be registered under GST. And therefore it doesn’t need to charge GST on the maintenance which is recovered from its members even after a monthly expenditure of a person for a flat might exceed Rs 5,000. If there are flats of different sizes in a housing society then the monthly bill also is less than Rs 5,000 and thus it falls outside the levy of the GST.
It is not always the case that you will have to pay the GST bill. In some cases, the water bill and the several amounts of taxes are considered to be the compensation for the GST amounts. In that case, the housing society won’t be able to charge you the GST amount.