GST on Housing Society Maintenance Charges

Residents of large apartment complexes often find an 18% GST line on their monthly maintenance bill, while friends in a smaller society down the road pay none. Both can be right. GST on apartment maintenance charges depends on two numbers: how much each member pays per month, and how much the resident welfare association (RWA) collects in a year. This guide explains the ₹7,500 rule, why crossing it taxes the whole bill, which charges are left out of the calculation, and what the society itself can claim back as input tax credit.

The two conditions that decide GST on maintenance

An RWA, or a cooperative housing society acting as one, supplies a service to its members: it runs the lifts, pays the guards, cleans the common areas and maintains the building. In return members pay a monthly contribution. Under GST that is a supply for consideration, but the exemption list carves out a specific relief for it. The society has to charge GST on a member's maintenance only if both of these are true:

1. The member's contribution is more than ₹7,500 a month. At ₹7,500 or less, the supply to that member is exempt.
2. The RWA's aggregate turnover for the financial year is above the registration threshold. For a supplier of services that is ₹20 lakh in most states and ₹10 lakh in the special-category states. The full table is in our guide to the GST registration turnover limit.

The second condition is easy to overlook. A small society whose members each pay ₹9,000 a month can still be outside GST altogether if its total collections are below the threshold. And when working out that total, remember that aggregate turnover counts exempt supplies as well as taxable ones, so contributions from members paying under ₹7,500 are added in. See annual aggregate turnover under GST for what goes into the figure.

Above ₹7,500, GST applies to the entire amount

The question residents ask most is whether a ₹9,000 bill attracts GST on ₹9,000 or only on the ₹1,500 above the limit. The long-standing CBIC position is that the ₹7,500 figure is a ceiling on the exemption, not a deduction. Once a member's monthly contribution exceeds ₹7,500, the exemption is lost for that member's contribution as a whole, and GST at 18% is charged on the full amount.

This reading has been argued over in court by some associations, who say only the excess should be taxed. The department has consistently applied the whole-amount reading, and it is the basis on which RWAs bill and file. If your association is weighing a different approach, take advice on the current state of the litigation before acting on it.

The rate itself is 18% (9% CGST and 9% SGST on an intra-state supply). Maintenance services stayed at 18% after the September 2025 rate rationalisation; see GST rate slabs in 2026 for the wider structure.

Worked example: ₹7,000 versus ₹9,000

Take an RWA with 250 flats in a high-rise complex. Its annual collections run well past ₹20 lakh, so it is registered and the turnover condition is met. Two members pay different amounts because their flats differ in size:

Member B pays ₹1,620 of GST, not the ₹270 that 18% of the ₹1,500 excess would give. The step at ₹7,500 is sharp: a member billed ₹7,600 pays ₹1,368 of tax, while one billed ₹7,500 pays none.

Now take a small society of 15 flats, each paying ₹9,000 a month. It collects ₹16.2 lakh a year. Every contribution is above ₹7,500, but the society's turnover is below ₹20 lakh, so it need not register and charges no GST. If it grows, or adds other income, and crosses the threshold, it has to register and start charging 18% on contributions above the limit.

What is left out of the ₹7,500

Maintenance bills often bundle amounts that are not really the society's service at all. Where the RWA collects money from members only to pay it on to a government body or a utility, at actual cost and without any markup, that money is treated as collected on the members' behalf. It is generally left out when testing the ₹7,500 limit and is not part of the taxable value. Typical examples:

• Property tax collected from members and paid to the municipal body;
• Electricity charges for a member's own flat, recovered on the actual meter reading and paid to the distribution company;
• Water charges billed by the local water authority and recovered at cost.

Two things keep this treatment safe. The amounts should appear as separate lines on the bill, recovered on actuals, and the society should be able to match them to the payments it made. If the RWA adds a margin, or folds a flat "electricity and water" figure into the maintenance charge, the case for leaving it out gets much weaker. Common-area electricity used to run lifts and corridor lights is the society's own cost of providing maintenance, and belongs inside the maintenance charge.

Sinking fund and repair fund contributions

Many societies collect a sinking fund, a repair and maintenance fund or a major repairs fund alongside the monthly charge. These are not pass-through amounts paid to a third party; they are collected by the society for its own future spending on the building. The general view, followed in advance rulings and by most practitioners, is that such contributions are consideration for the society's services to members. They count towards the ₹7,500 test and, where the limit is crossed, form part of the taxable value.

Whether a particular fund is counted can depend on how the bye-laws describe it and how it is billed, so a society close to the limit should look at its own structure rather than assume. A one-time corpus or a refundable deposit is a different question again, and is best confirmed with the society's adviser.

Two flats owned by one person

A member who owns two flats in the same society might pay ₹6,000 for each, ₹12,000 in total. The clarified position is that the ₹7,500 limit is applied per residential apartment, not to the combined amount a person pays. Each flat's ₹6,000 is tested on its own, both are within the limit, and no GST is charged. If each flat's charge were ₹8,000, both would be taxable in full.

Input tax credit for the society

A registered RWA pays GST on much of what it buys: security and housekeeping contracts, lift and generator maintenance, repair work, pumps, generators, sanitary fittings, pipes and paint. It can claim input tax credit on these goods, input services and capital goods when they are used to provide its maintenance service, on the same conditions that apply to any business. Our explainers on input tax credit rules and ITC on capital goods cover the conditions and the documents needed.

Because members under the ₹7,500 limit receive an exempt supply, the society makes both taxable and exempt supplies. Credit used for both has to be split, with the share relating to exempt supplies reversed, under the rules explained in ITC reversal under Rules 42 and 43. Credit on items blocked under Section 17(5), such as most works contracts for building construction, is not available at all.

Since the RWA's credit depends on its vendors filing their returns and holding a valid registration, it pays to confirm a contractor's GSTIN is active before the first invoice is booked. A GSTIN verification lookup shows the registration status, legal name and filing record in a few seconds.

Income from non-members is taxable

The exemption covers contributions from members for the society's common services, and nothing else. Income from outsiders, such as rent for a mobile tower on the terrace, hoardings on the boundary wall, or hiring out the clubhouse to non-residents, is an ordinary taxable supply. It counts towards the society's aggregate turnover and can by itself push the society past the registration threshold. Where the society is the tenant rather than the landlord, the reverse charge rules for renting covered in GST on rent may also apply.

Residents who want to check that the GST on their bill is genuine can match the society's GSTIN against the public register; is the GST on my bill real walks through how. A society that is not registered should not be charging GST at all.

Frequently asked questions