GST applicable on housing society maintenance exceeding ₹7,500 a month or ₹20 lakh a year

In India's Union Budget, a provision was introduced to levy 18% Goods and Services Tax (GST) on luxurious apartments where monthly maintenance charges exceed ₹7,500 or the revenue is more than ₹20 lakh annually. With the implementation of this provision, thousands of luxury apartments in Ahmedabad now fall under the GST.

Across Gujarat, over 1 lakh luxury apartments and bungalows that form housing societies will now be subject to 18% GST, as per reports.

GST officials have started surveying luxury apartments across Ahmedabad and the rest of the state. They are collecting data on societies where maintenance fees exceed ₹7,500 per month. Based on this data, housing societies that haven’t obtained a GST number will be issued notices and instructed to register for GST.

It is estimated that residents of more than 3,000 luxury apartments in Ahmedabad will now have to pay at least ₹1,350 as GST (18% of ₹7,500) every month. This provision applies to all Residential Welfare Associations (RWAs) as well, meaning that residents of bungalow societies will also be required to pay GST at 18%.

According to the GST circular, if an RWA has an annual turnover exceeding ₹20 lakh and an individual flat owner pays more than ₹7,500 per month as maintenance, then the 18% GST will apply not just on the amount exceeding ₹7,500, but on the entire maintenance amount.

For example, if the maintenance fee is ₹9,000 per month, the 18% GST will apply on the full ₹9,000. Moreover, if an individual owns two or more apartments in a housing society or residential complex, they will be liable to pay GST on each unit's maintenance amount every month.

Any RWA with an annual turnover above ₹20 lakh and monthly maintenance above ₹7,500 will be subject to this 18% GST rule. With ₹7,500 per month translating to ₹90,000 per year per unit, even a society with just 23 apartments or bungalows could easily cross the ₹20 lakh turnover threshold. This would result in a minimum GST liability of ₹3.60 lakh annually.

When factoring in the cost of hiring GST consultants and auditors, the total annual financial burden on the apartment society could rise to approximately ₹5 lakh.

The central government clarified that GST on RWAs is not new—it has been in effect since 2019. Although GST was introduced in 2018, the exemption limit for maintenance charges was raised from ₹5,000 to ₹7,500 in 2019. This rule was challenged in the Madras High Court, which in 2023 ruled that GST cannot be levied on the entire amount.

However, the central government has not challenged this verdict in the Supreme Court, but has now reinstated the old rule, making it mandatory for housing societies to obtain GST registration and conduct audits. This is expected to directly increase the financial burden on residents.

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