Is GST applicable on maintenance charges collected by builders?

Whenever GST is talked about, there are a lot of questions and queries pop up from every nook and corner of the room. It is really confusing for people to get hold of this concept and know about its applicability. If you are buying a house and want to know what is GST on maintenance charges collected by builders, is it even applicable or not then I am going to resolve these for you here.

You need to first understand that if the builder is the one who is responsible for maintenance of the society he can charge GST on maintenance. The builders charge advance maintenance charges for a year or two from the residents. They can also charge GST if the property is under construction and RWA has not been formed yet. 

However, you should always check how much GST the builder is charging you. You must also be aware that he has a GST number and that the GST is being deposited with the government as per the law. 

If the builder hands over maintenance to RWA within 2 years then GST is refunded. 

Since we are talking about GST on maintenance I thought I can quickly tell you about GST applicability in case of RWA.

• If the maintenance is less than Rs. 7500 per month no GST is applicable.

• If the annual turnover of RWA is less than Rs. 20 lakhs then no GST is applicable

• If the maintenance charges exceed Rs. 7500 GST at the rate of 18% is applicable on the whole amount

Is GST applicable on society maintenance charges? Find out.

 The applicability of Goods and Services Tax (GST) on maintenance charges collected by builders for housing societies and residential complexes is uncertain.

Builders are liable to pay GST on the construction services they provide to the buyers. This also includes the cost of construction materials and labor.

The builders include 18% GST in the monthly maintenance fees.

GST on maintenance charges of residential building is exempted

up to Rs7500 per month.

 The Authority for Advance Ruling (AAR) ruled that GST is applicable on maintenance charges as they are considered a part of the overall transaction.

However, GST regulations and interpretations are updated frequently, you should consult a lawyer or CA or stay updated with the government notifications about the GST on apartment maintenance charges.

One of the expenses associated with purchasing a home is maintenance fees for apartments. The owners or tenants of apartments must pay this maintenance fees either monthly or yearly to maintain and operate their structures. The upkeep of your apartment and the common areas is crucial since it determines how long these tall buildings remain. And if you want to know if is GST applicable on advance maintenance charges collected by builders, keep reading.

Can builder charge GST on maintenance?

If a housing society contributes more than Rs. 7500 per member per month to the Resident Welfare Association (RWA), it must pay 18% GST. This is the GST on advance maintenance charges collected by builders.

The annual charges for the society must surpass Rs 20 lakhs, and the monthly maintenance fees for each apartment or office must exceed Rs 7,500. If the maintenance fees are determined by the size of the apartment or office, it's feasible that the society won't collect GST for smaller apartments or offices while charging it for larger apartments or offices. This guides you about the GST on maintenance deposit collected by builders.

What percentage of the maintenance fees is taxable under the GST?

It is not essential for society to add GST to all of the membership-related products on the bill. The housing society is not allowed to add GST to fees that are effectively member reimbursements for costs incurred by the organisation.

Municipal taxes, property taxes, water bills, non-agricultural land taxes, electricity costs for shared spaces, and other taxes and utility payments made on behalf of housing society members may fall under this category. Similarly to this, sinking fund donations are free from GST. On the other hand, the member's payments to the repair fund must be subject to a GST charge by the housing society.

Is GST applicable on advance maintenance charges collected by builders must be clear to you.

Hi there,

Living in a gated community, you need to pay maintenance charges every month. These maintenance charges are required for security, and utility services required by the society members, maintaining every part of the society. And for this, every resident is required to pay a significant amount. But what are GST on society maintenance charges by builder? I will share my perspective on this one.

What is the GST on flat maintenance charges by builder?

I have checked Mr Sarthak’s answer about GST on maintenance charges. It is collected by the Residential Welfare Association (RWA).

But before the development of society GST is applicable for a one-time maintenance deposit which is collected by the builders from the home buyer. The maintenance charges are on the basis of the per sq ft rate. Since there is a lot of confusion regarding GST on maintenance charges you may ask if GST is applicable for one-time maintenance charges taken by the builder. 

As a practice builders or developers deduct 18% maintenance charges GST right after collecting the one-time maintenance charges and depositing them into the fund.

I hope I was able to clear the doubt regarding GST on society maintenance charges by builder.

Read more:

If you live in a society, high changes you might have wondered about the maintenance charges. From upkeep of the common areas, common equipment to repairs of society property, everything falls under maintenance charges. If you want to know what is gst on maintenance charges. Read more. 

Yes, GST is applicable on maintenance charges. The maintenance is paid by the resident to the RWA rather than to the landlord. The housing society RWA keeps an eye on the common area and machines.

Residents of a society have to pay maintenance charges. If the maintenance charge amount is more than Rs. 7000, the resident can apply and get tax exemption.

All the GST  on maintenance charges is collected by the warfare association of the building society. They cannot claim for  tax exemptions on the maintenance collected.

GST on society maintenance is calculated with the help of a fixed rate levied per sq ft of the area of the flat. Consult with a builder or your landlord to know the exact  gst on maintenance charges that you should be giving.

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