Is GST payable on society maintenance charges?

This is the single most misunderstood compliance question in Indian society management, and the confusion is not the committees' fault — the law here has genuinely been litigated, and the position depends on which authority you ask.

The two thresholds

A resident welfare association or cooperative housing society is outside the GST net unless both of the following are crossed:

1. Monthly contribution per member exceeds ₹7,500, and
2. Aggregate annual turnover exceeds ₹20 lakh (the threshold for GST

registration; ₹10 lakh in some special category states).

Get either one wrong and the answer flips.

Where GST does apply, the rate on maintenance services is 18%.

The part that is actually contested

Assume both thresholds are crossed and a member pays ₹9,000 a month. Is GST charged on ₹9,000, or on the ₹1,500 above the limit?

• CBIC's Circular 109/28/2019 took the position that once the ₹7,500 limit

is breached, GST is payable on the entire amount — the full ₹9,000.

• The Madras High Court, in Greenwood Owners Association v. Union of India

(2021), held that the exemption applies to the first ₹7,500 and GST is payable only on the excess — ₹1,500.

That divergence has not been cleanly settled nationally, and the department has contested the position. The practical consequence for a committee is uncomfortable but simple: this is exactly the question to put to your society's chartered accountant, in writing, and to follow their advice consistently rather than switching approaches between years.

What counts towards the ₹7,500

The threshold is on the member's contribution towards the society's own maintenance services. It generally includes the routine heads a society raises: common-area maintenance, housekeeping and security, lift maintenance, common-area electricity, repair and maintenance fund contributions.

It generally excludes amounts the society collects as a pure agent — that is, where the society collects a statutory levy and pays it straight on to the authority. Municipal property tax and water charges billed by the local body are the standard examples.

This matters more than it looks. A society billing ₹8,200 a month may be under the threshold once property tax collected as a pure agent is stripped out — and the pure-agent treatment only holds if the invoice actually separates those components. A single lumped "maintenance ₹8,200" line makes the argument much harder to sustain.

Practical consequence for your bill format

Break the bill into named heads rather than one figure:

A society that itemises this way has a documented position. A society that bills one number has an argument to make after the fact.

The per-member point

The ₹7,500 is assessed per member, not as a society average. Two consequences that catch committees out:

• In a society with mixed flat sizes billed on area, larger flats can cross the

limit while smaller ones do not. The assessment is individual.

• Where one person owns two flats, the general position is that the limit

applies to each flat separately rather than being aggregated.

If you register

Once registered, the obligations are ordinary GST obligations — issue tax invoices, file returns on time, and maintain records. The one genuine upside is input tax credit: a registered society can claim credit on GST paid on inputs such as security agency services, housekeeping contracts, lift AMCs and repair works. For a society with heavy contracted services, ITC can offset a meaningful part of the output liability.

Reverse charge is also worth flagging: certain inward supplies, including some services from unregistered suppliers and specified categories such as legal services, can attract GST payable by the society itself.

What to actually do

1. Work out your real per-member monthly figure, separating pure-agent

collections from society charges.

1. Check turnover against the ₹20 lakh threshold on a rolling basis, not

just at year end — a special levy can push a society over mid-year.

1. If you are anywhere near either line, get a written CA opinion covering

the whole-amount versus excess-amount question and keep it on file for the auditor.

1. Itemise the bill regardless. It costs nothing and it is the difference

between a defensible position and a reconstruction.

1. Keep invoice records that can be produced per member per month. If your

billing lives in a spreadsheet, this is the point at which it typically stops being adequate.

Related reading: what transparent society accounts look like, and how to calculate maintenance charges fairly — the head-wise structure that makes the GST position easier to defend is the same structure that makes charges easier to justify to members.

Sources

• CBIC tax information portal — GST circulars and notifications
• Central Board of Indirect Taxes and Customs

CBIC Circular 109/28/2019 and Greenwood Owners Association v. Union of India (Madras High Court, 2021) are referred to above by name. Both are readily searchable; the divergence between them is unresolved, which is precisely why a written CA opinion matters here.