An 18% goods and services tax (GST) on the total amount may cause monthly prices for flat owners who pay maintenance fees above Rs 7,500 to increase even higher, according to reports. The New Indian Express reports that 18% GST is applied on the entire maintenance payment, not just the amount over Rs 7,500, if a housing society's (RWA) yearly turnover surpasses Rs 20 lakh and an individual flat owner pays more than Rs 7,500 in maintenance each month. To help RWAs and housing societies, the GST Council raised the exemption ceiling from the original Rs 5,000 to Rs 7,500 per month at its 25th meeting in January 2018.
Here’s how it will work:You will now be charged an extra Rs 1,620 as GST, making your monthly bill Rs 10,620, if you are paying Rs 9,000 for maintenance and your society's yearly turnover exceeds Rs 20 lakh.
According to The New Indian Express, the Ministry of Finance & Corporate Affairs' office of the Director General (M&C), Press Relations & Information Division, has explained that a RWA will not be obliged to register and pay GST even if its monthly maintenance fees exceed Rs 7,500 per member if its total revenue for the fiscal year does not exceed Rs 20 lakh.
The ministry also explained that RWAs can claim the Goods and Services Tax (GST) input tax credit (ITC) for capital goods (such as generators, water pumps, lawn furniture, etc.), goods (such as pipes, taps, and other hardware or sanitary fillings), and input services (such as maintenance and repair services).
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Regarding how the tax burden would be determined for an individual who owns two or more apartments in a housing society or residential complex, the ministry stated that in these situations, the monthly cap of Rs 7500 per member would be applied independently for each of his residential apartments.