Circular · CBIC, Ministry of Finance · 22.07.2019
GST on maintenance charges: the ₹7,500 and ₹20 lakh tests
The Central Board of Indirect Taxes and Customs circular of 22 July 2019 clarifies when a housing society (an RWA, in GST terms) must pay GST on members’ monthly contributions.
Key points
- Maintenance contributions of up to ₹7,500 per month per member are exempt from GST (the limit was ₹5,000 before 25.01.2018).
- A society whose annual aggregate turnover is ₹20 lakh or less need not register or pay GST, even if some members pay more than ₹7,500.
- If both thresholds are crossed, GST at 18% is payable on the entire amount, not just the excess over ₹7,500.
- The ₹7,500 limit applies per flat, so a person owning two flats gets the exemption for each.
- A society paying GST can take input tax credit on capital goods, goods and input services such as repairs.
What the circular clarifies
| Question | Clarification |
|---|---|
| Are maintenance charges exempt, and up to what limit? | Yes, contributions by members for common services and goods are exempt up to ₹7,500 per month per member (₹5,000 before 25.01.2018). |
| Small society (turnover ₹20 lakh or less), charges above ₹7,500 | No registration or GST needed. GST is payable only if the monthly charge exceeds ₹7,500 and the annual turnover is ₹20 lakh or more. |
| Input tax credit | Available on capital goods (generators, pumps, lawn furniture), goods (taps, pipes, fittings) and input services such as repairs and maintenance. |
| Person owning two or more flats | The ₹7,500 ceiling applies separately to each flat. |
| How to calculate GST above the limit | On the whole amount. If the charge is ₹9,000, GST at 18% is on ₹9,000, not on ₹1,500. |
Who is liable
| Annual turnover | Monthly charge per member | Exempt? |
|---|---|---|
| More than ₹20 lakh | More than ₹7,500 | No |
| More than ₹20 lakh | ₹7,500 or less | Yes |
| ₹20 lakh or less | More than ₹7,500 | Yes |
| ₹20 lakh or less | ₹7,500 or less | Yes |
What it means in practice
A society should check both thresholds every year. Where it is liable, it must register, charge GST on the full monthly contribution of members above ₹7,500, and can claim input tax credit on its purchases. Contributions to sinking and repairs funds and the treatment of particular items can raise further questions; a chartered accountant should be consulted.
Three-page circular in English. GST rates and thresholds can change; check the current notifications. This page summarises the document for general information; it is not a translation and not legal advice. Read the document itself for its exact terms, and check whether it has since been amended or superseded.
Have a question about your society?
Write to the office with a brief description of the matter. Meetings are by prior appointment.