GST payable on maintenance charges

18 Nov 2020 CW Team

With this background, a Nariman Point cooperative housing society (CHS) had filed an appeal against this order. But its efforts proved ineffectual as the GST Appellate authority for advance rulings, Maharashtra bench upheld the previous ruling and stated that GST has to be collected on the maintenance charges if it exceeds the threshold limit.

July 14 ruling of Authority for Advance Ruling (AAR) Maharashtra stated that activities of Nariman CHS towards its members were “taxable supplies” under the GST Act.

Various tax experts were not satisfied with this ruling as they did not think that these activities could be construed as ‘supply’ of services. Also, often certain tax scrutineer’s consider temporary tax cuts as a good fix in a downturn.

However, the Nariman CHS went on to highlight the point that it did not “supply” any service to its members. Also, in its appeal, the CHS had mentioned that AAR had failed to consider various judicial decisions especially that of the Supreme Court in 2009 case of Calcutta club which dealt with the ‘doctrine of mutuality’. This principle elucidates that the society and its members are not distinct entities further helping CHS in consolidating the point that CHS was not supplying any goods or services and henceforth does not come under the purview of GST.

But the appellate bench negated all these contentions and stated that the Supreme Court’s order was not applicable here as this order was relevant during the sales tax regime and the concept of supply has evolved to develop a wider meaning under the GST law.

To reiterate, the following conditions need to be satisfied for the application of GST on maintenance charges:

1. The aggregate of the charges levied by the society should exceed Rs 20 lakhs in a financial year and

2. The amount of the monthly maintenance charge for the particular flat or office should exceed Rs 7,500.

So, if the aggregate of maintenance charges levied by the housing society exceeds the threshold of Rs 20 lakhs in a financial year, it has to register itself under the GST laws and obtain a registration number.

Additionally, it is important to note that society does not have to levy GST on all the components billed in the invoice to the members. For example, the housing society cannot levy GST on charges which are in the nature of reimbursement of expenses is such that it is incurred by the society and recovered from its members such as various taxes and utility payments made by the housing society on behalf of the members. However, the housing society has to levy GST on the contribution made by the members towards the repairs funds.

The finance ministry on July 22, 2019, had mentioned that a GST rate of 18 per cent applied to the flat owners if their monthly contribution to the residents’ welfare association (RWA) exceeded Rs 7,500.With this background, a Nariman Point cooperative housing society (CHS) had filed an appeal against this order. But its efforts proved ineffectual as the GST Appellate authority for advance rulings, Maharashtra bench upheld the previous ruling and stated that GST has to be collected on the maintenance charges if it exceeds the threshold limit.July 14 ruling of Authority for Advance Ruling (AAR) Maharashtra stated that activities of Nariman CHS towards its members were “taxable supplies” under the GST Act.Various tax experts were not satisfied with this ruling as they did not think that these activities could be construed as ‘supply’ of services. Also, often certain tax scrutineer’s consider temporary tax cuts as a good fix in a downturn.However, the Nariman CHS went on to highlight the point that it did not “supply” any service to its members. Also, in its appeal, the CHS had mentioned that AAR had failed to consider various judicial decisions especially that of the Supreme Court in 2009 case of Calcutta club which dealt with the ‘doctrine of mutuality’. This principle elucidates that the society and its members are not distinct entities further helping CHS in consolidating the point that CHS was not supplying any goods or services and henceforth does not come under the purview of GST.But the appellate bench negated all these contentions and stated that the Supreme Court’s order was not applicable here as this order was relevant during the sales tax regime and the concept of supply has evolved to develop a wider meaning under the GST law.To reiterate, the following conditions need to be satisfied for the application of GST on maintenance charges:1. The aggregate of the charges levied by the society should exceed Rs 20 lakhs in a financial year and2. The amount of the monthly maintenance charge for the particular flat or office should exceed Rs 7,500.So, if the aggregate of maintenance charges levied by the housing society exceeds the threshold of Rs 20 lakhs in a financial year, it has to register itself under the GST laws and obtain a registration number.Additionally, it is important to note that society does not have to levy GST on all the components billed in the invoice to the members. For example, the housing society cannot levy GST on charges which are in the nature of reimbursement of expenses is such that it is incurred by the society and recovered from its members such as various taxes and utility payments made by the housing society on behalf of the members. However, the housing society has to levy GST on the contribution made by the members towards the repairs funds.

Technology

28 Oct 2025

Building Faster, Smarter, and Greener!

Backed by ULCCS’s century-old legacy, U-Sphere combines technology, modular design and sustainable practices to deliver faster and more efficient projects. In an interaction with CW, Rohit Prabhakar, Director - Business Development, shares how the company’s integrated model of ‘Speed-Build’, ‘Smart-Build’ and ‘Sustain-Build’ is redefining construction efficiency, quality and environmental responsibility in India.U-Sphere positions itself at the intersection of speed, sustainability and smart design. How does this translate into measurable efficiency on the ground?At U..

Infrastructure Transport

28 Oct 2025

Smart Roads, Smarter India

India’s infrastructure boom is not only about laying more kilometres of highways – it’s about building them smarter, safer and more sustainably. From drones mapping fragile Himalayan slopes to 3D machine-controlled graders reducing human error, technology is steadily reshaping the way projects are planned and executed. Yet, the journey towards digitisation remains complex, demanding not just capital but also coordination, training and vision.Until recently, engineers largely depended on Survey of India toposheets and traditional survey methods like total stations or DGPS to prepare detai..

Real Estate

28 Oct 2025

What Does DCPR 2034 Mean?

The Maharashtra government has eased approval norms for high-rise buildings under DCPR 2034, enabling the municipal commissioner to sanction projects up to 180 m on large plots. This change is expected to streamline approvals, reduce procedural delays and accelerate redevelopment, drawing reactions from developers, planners and industry experts about its implications for Mumbai’s vertical growth.Under the revised DCPR 2034 rules, buildings on plots of 2,000 sq m or more can now be approved up to 180 m by the municipal commissioner, provided structural and geotechnical reports are certified b..