GST Applicability to Housing Societies: 5 Important Questions & Answers

July 26, 2019

Team MyGate

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The subject of GST confuses most housing societies and their members. Every week, we receive a number of GST-related queries on how GST is applicable to co-operative housing societies. Therefore, in this article, we have curated the five questions we’re most commonly asked. Let’s begin…

1. Is GST applicable to maintenance charges paid by residents?

Maintenance charges up to an amount of Rs. 7500 per month, per member, are exempt from GST. Earlier, the exemption was available on a monthly maintenance charge of up to Rs. 5000 per member. The limit was increased to Rs. 7500 with effect from 25th January 2018.

2. When does a housing society need to register for GST and pay GST on maintenance charges?

A housing society is required to get a GST registration if its aggregate turnover for a financial year is more than Rs. 20 lakh. Also, in such a case, GST is payable only if the society collects a monthly maintenance charge of more than Rs. 7500 per member.

Societies with an aggregate turnover of Rs. 20 lakh or less are exempt from GST – irrespective of whether monthly maintenance charges are less or more than Rs. 7500 per member.

Find out if your society is exempt from GST

Annual turnover of a housing societyMonthly maintenance chargeGST
Rs. 20 Lakh or less Rs. 7500 or lessExempt
More than Rs. 7500Exempt
More than Rs. 20 LakhRs. 7500 or lessExempt
More than Rs. 7500Applicable

3. When is a housing society entitled to take Input Tax Credit (ITC)?

Housing societies are entitled to take ITC of GST paid by them on capital goods – generators, water pumps, lawn furniture etc. – other goods – taps, pipes, other sanitary/hardware fillings etc. – and input services such as repair and maintenance.

4. How does the GST exemption work if a person owns two or more flats in a housing society?

In such case, GST exemption of Rs. 7500 per month, per apartment, shall be applied separately for each apartment owned by him.

For example, if a person owns two residential apartments in a society and pays Rs. 15000 per month as a maintenance charge (calculated at Rs. 7500 per month, per apartment), the exemption from GST shall be available to each apartment.

5. How is GST payable in societies where maintenance charges exceed Rs. 7500 per month, per member?

In case, for a society, the maintenance charges exceed Rs. 7500 per month, per member, the entire amount is taxable.

Let’s understand this with an example. If the monthly maintenance charges for a housing society are Rs. 9000 per member, the GST @18% shall be payable on the entire amount of Rs. 9000 and not on Rs. 1500.

* Refer to the latest GST circular issued by the Government of India, Ministry of Finance Department of Revenue (Tax Research Unit), New Delhi.

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