New delhi: AMID Rising Concerns and Confusion Among Apartment Residents, Tax Officials Have Clarified That The Goods and Services Tax (GST) On Apartment Maintenance Charges is not a new RULE. It is an existing regulation that has been in place since 2019, they maintained.
The Clarification Comes As Housing Societies Across the Country Witness Growing Panic and Debate, Especially on Social Media and in Community Meetings. As per A NDTV Profit Report, The Central Board of Indirect Taxes and Customs (CBIC) Had, In 2019, Directed Flat Ownes Must Pay 18 per cent on Maintenance Charges Association (RWA) Exceds Rs 7,500 per month.
This has been a long-standing rule, but it has recently come back into the spotlight due to stricter compliance efforts by tax officials.
However, a 2021 ruling by the Madras High Court Broght Some Relief. The court Rules that GST should be charged only on the purtion of the maintenance Amount that exceds Rs 7,500 – not on the full amount.
This ruling effectively overrled a 2019 circular is the CIBIC and a decision by the authority for advance rulings (aar), which has stated that if the monthly charges excedeed rs 7,500, then gst. The entry Amount, and not just the excess.
Importantly, the tax department has not appeared the Madras High Court Judgment in any Higher Court so far. This means the ruling stands, but it may not be followed uniformly across all states. Some tax authorities may still choose to go by the original Cibic Interpretation, The Report Said.
Currently, rwas are required to collect 18 per cent on monthly Maintenance Charges only if two specific conditions are met: the per-complement monthly maintenance exaeeds at 7,50000, and the Society’s Annual Turnover is more than Rs 20 lakh.
If bot these conditions apply, then the Housing Society Must Register Under GST and Charge Tax on the Entre Maintenance Amount, It Added. The report also said that many Apartment complexes in big cities are still not following this rules. As a result, the tax department is now urging rwas to complete and ensure proper tax payments.