It can be only collected above 20 lakhs of maintenance bill
GST on housing society - on special repair charges - being collected
We are a 5 building, 140 flat (28 flat in every building) housing society, in Thane, Maharashtra. Our normal monthly maintenance is Rs. 2600 odd, including Property Tax component of Rs.500, which is paid to the municipal corporation. We are starting with major repairs to our buildings. In this regard, the residents will be billed Rs.7450 additional, per month, for 18 months. This is a special 1-time project only, and so residents will be billed separately for this. Queries a) Do we need to levy GST on this repair bill of Rs.7450 b) Do we need to levy GST on the regular bill of Rs. 2600 also c) If required to levy, what is the GST rate to be applied? And by when it has to be paid to Govt. d) Through which items can we claim offset of this GST amount, if we are required to levy it to residents. Please advise. Thanks.
Asked 2 years ago in Taxation
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6 Answers
A housing society is required to pay 18% GST if its per-month contribution to the Resident Welfare Association (RWA) exceeds Rs. 7500 per member
2) GST is applicable if the total yearly maintenance cost turnover exceeds Rs. 20 Lacs.
3) The exempted elements include a variety of taxes and utility payments that the housing society makes on behalf of the residents, such as municipal taxes, property taxes, water bills, non-agricultural land taxes, energy bills for shared facilities, etc. Similarly, donating to the sinking fund is likewise exempt from GST. However, the housing society is required to charge GST on the members' contributions made to the repair funds as per maintenance charges on flats.
4) consult a local CA
SAC (Services Accounting Code) code 9987 is used to classify maintenance services in India. This code covers a wide range of maintenance services, including repairs, cleaning, and upkeep of various assets and equipment. SAC code 9987 is used to determine the GST rate for maintenance services in India.
Maintenance services are classified under SAC code 9987 and are subject to GST (Goods and Services Tax) in India.
The GST rate for building maintenance services is 18% for most services. Some maintenance services may be exempt from GST if they are considered essential services.
- As per rule , if the society’s monthly maintenance bill is more than Rs.7500 per house, 18% GST is applicable on the entire amount.
a) No
b) No
Dear Client,
There is an exemption if the annual aggregate turnover of the housing society is not over Rs 20 lakh. Thus, for GST to apply, two criteria must be met. Rate of Tax: Tax is payable @18% on the entire taxable proceeds.
Housing society maintenance charges income tax exemption: Yes, up to Rs. 7,500 in maintenance fees paid by residents to the Resident Welfare Association are exempt.
So in your case you can get an exemption for it.
Thank You
Dear client,
GST on Repair Bill of Rs. 7,450: The GST applicability on this repair bill would depend on whether the housing society is registered under GST. Generally, if the annual turnover of the housing society is above the threshold limit (currently Rs. 20 lakhs for services), it may be required to register for GST. If registered, GST could apply to the repair charges.
b) GST on Regular Bill of Rs. 2,600: The regular maintenance charges, including property tax, may not attract GST, as they are typically exempt. However, this may vary based on specific circumstances, and you should seek professional advice.
c) GST Rate and Payment: If GST is applicable, the rate can vary depending on the nature of the services provided. GST rates may include 18% or 12% for certain services. The specific rate should be determined based on the type of repair services provided. GST is generally payable on a monthly or quarterly basis.
d) Offset of GST: If you are required to levy GST, you may be eligible to claim input tax credit (ITC) on GST paid for expenses related to the repair and maintenance work. This can include goods and services used for the repair project. However, the eligibility for ITC depends on compliance with GST regulations.
