18% GST Applicable on Apartment Maintenance More than Rs.7,500

In light of rising concerns and widespread confusion among apartment owners and Resident Welfare Associations (RWAs), the Finance Ministry has clarified that an 18% GST will be applicable on monthly apartment maintenance charges exceeding ₹7,500 per member. The update outlines key rules for Resident Welfare Associations (RWAs) and eligibility for Input Tax Credit (ITC).

This clarification was prompted by an article published in a news protal on April 11, titled “GST shadow looms over apartment complexes.” The report brought to attention the uncertainty prevailing among residents and RWA office bearers regarding the threshold, taxability, and compliance requirements under the GST framework.

18% GST Key Highlights of the Finance Ministry’s Clarification

18% GST Applicable on Charges Above ₹7,500: The Ministry has reiterated that GST at the rate of 18% is applicable only when the monthly maintenance contribution from a member exceeds ₹7,500.

1. Turnover Threshold of ₹20 Lakh: If the aggregate annual turnover of the RWA is less than ₹20 lakh, the association is not required to register under GST, nor is it obligated to charge GST—even if individual contributions exceed ₹7,500 per month. This exemption is granted under the broader GST rules applicable to all service providers with turnovers below the ₹20 lakh threshold.
2. Tax Applies to Entire Amount if Both Limits are Crossed: If an RWA’s turnover exceeds ₹20 lakh annually and the maintenance fee from a member surpasses ₹7,500 per month, GST is levied on the entire maintenance amount, not just the portion exceeding ₹7,500. For instance, if a member is billed ₹9,000 per month, the full amount of ₹9,000 becomes taxable at 18%, not just the excess ₹1,500.
3. Multiple Apartments Owned by a Single Individual: For individuals owning more than one apartment in the same complex, the ₹7,500 threshold is applied separately to each apartment. This ensures that ownership of multiple flats does not unfairly trigger GST liability on otherwise exempt contributions.
4. Enhanced Exemption Limit Introduced in 2018: The GST Council, in its 25th meeting on 18 January 2018, revised the original exemption limit of ₹5,000 to ₹7,500 per month per member, offering relief to numerous RWAs and their residents by narrowing the scope of tax applicability.
5. Input Tax Credit (ITC) – A Major Relief Under GST: One of the significant advantages for RWAs under the GST regime is their eligibility to claim Input Tax Credit (ITC). This allows them to offset the GST paid on:
   • Goods like taps, pipes, sanitary fittings, etc
     
   • Capital goods such as water pumps, generators, and lawn equipment
     
   • Input services including maintenance, repair, and housekeeping contracts.

Conclusion 

The Ministry’s clarification aims to dispel misconceptions around GST on apartment maintenance and outlines specific thresholds and exemptions applicable to RWAs. The availability of Input Tax Credit (ITC) further strengthens the financial efficiency for registered RWAs. Apartment residents and management committees are advised to evaluate their association’s annual turnover and monthly charges to determine their GST obligations accurately. Consult an expert from Vakilsearch for clear information on GST related queries. 

• Author
• Recent Posts

Akash G Varadaraj

Content Writer at Vakilsearch

I'm Akash. G. Varadaraj, an official content writer at Vakilsearch with over four years of experience. I'm here to simplify complex legal concepts into easily accessible articles that even a layman can understand. As a regular contributor to this news portal, I aim to keep you informed in the dynamic world of law, compliance, taxation, and much more. I ensure that you get to know our Vakilsearch expert's take on every piece of news, how it can help, and what you should do.

Latest posts by Akash G Varadaraj (see all)

• Chandigarh: Excess Property Tax Paid To Be Adjusted in Next FY - April 25, 2025
• High Court Halts Rs.400 Cr GST Penalty on Shemaroo Executives - April 18, 2025
• SC Lays Down Key Tests to Differentiate Copyrighted Works from Industrial Designs - April 16, 2025