GST on Apartment Maintenance: No Burden on Residents

GST on Apartment Maintenance: No Burden on Residents
— FM Sitharaman Clarifies

Date: July 29, 2025
Source: Finance Minister's Lok Sabha reply

🔑 Key Highlights

No compliance burden on individual residents: GST obligations rest solely with the apartment association, not occupants.
Registration threshold: Associations must register under GST only if aggregate annual turnover exceeds ₹20 lakh (₹10 lakh in special category states).
Exemption limit: Monthly maintenance up to ₹7,500 per flat per member is exempt.This limit was increased from ₹5,000 per member, effective January 2018 GST Council 25th meeting.
GST @18% applies on full maintenance amount if it exceeds ₹7,500, and if the association is registered.
No official GST status letter is required from residents or associations.
Penalty relief: Under the CGST Act, those who clear due tax within prescribed timeline may avoid or incur reduced penalties. Notification dated October 8, 2024 extends waiver of interest/penalty for notices under Section 73 July 2017 to March 2020 until March 31, 2025.

Introduction

In her Lok Sabha written reply dated July 28, 2025, Finance Minister Nirmala Sitharaman clarified that residents of apartment complexes bear no direct GST burden or compliance obligations on maintenance charges—even if they pay above ₹7,500 per month. GST liability, if any, lies solely with the apartment association RWA as the service provider.

1. Who Has the Obligation?

Apartment associations, not individual residents, are treated as providers of maintenance services under GST law.
Individual flat-owners have no direct registration or payment obligation, regardless of the amount of maintenance paid.

2. Registration Threshold

Associations are required to register only if annual turnover from maintenance and related services exceeds ₹20 lakh ₹10 lakh for special category states.
Below this threshold, no GST registration or compliance is required.

3. Exemption Threshold

Maintenance charges up to ₹7,500 per member per month are fully exempt, even if association is registered.
Originally capped at ₹5,000, this exemption was uplifted in January 2018, following recommendations of the GST Council’s 25th meeting.

4. GST Applicability and Tax Rate

If both conditions are met—
- association is GST-registered and
- maintenance charges exceed ₹7,500—then GST at 18% applies to the entire amount, not just the portion above the threshold.

5. Relief Mechanism

Taxpayers including associations who have defaulted on GST dues for the period July 1, 2017 – March 31, 2020 may settle their liabilities without penalty or reduced penalty, if paid by March 31, 2025. This was extended via a Finance Ministry notification on October 8, 2024.

6. No Formal Certification Required

Neither residents nor associations need to issue or obtain a certificate regarding GST applicability status under the CGST law.

7. Government Outreach & Compliance Assistance

The Finance Ministry organises Taxpayer Samvad sessions, workshops, and operates GST facilitation centres to help associations correctly determine their GST position and avoid compliance errors.

Why This Matters to Apartment Societies
Clarity: Removes confusion among residents and executives on responsibility for GST.
Financial Planning: Helps societies anticipate additional costs if maintenance exceeds ₹7,500.
Compliance Strategy: Associations below threshold may avoid registration entirely, reducing administrative burden.
Relief for Defaults: Societies can benefit from penalty waiver schemes if dues are settled promptly.
Legal Precedence: Aligns with CBIC circular of July 2019 and GST Council norms.

CsLawship.in will continue to monitor any further clarifications or amendments. Please follow for expert legal breakdowns, compliance guidance, and taxation updates tailored for apartment associations and consulting professionals. Prepared by CsLawship.in Editorial Team