As per Union Finance Minister Nirmala Sitharaman, residents of smaller apartments with maintenance charges less than Rs 7,500 are not burdened by Goods and Services Tax (GST) compliance requirements, nor are they required to pay GST on these charges.
The clarification has arrived in answer to a Lok Sabha question raised by the members Manickam Tagore B and Suresh Kumar Shetkar.
The statement of the Minister cites that the GST compliance requirements, if any, are placed on apartment associations as service providers, not on individual residents. Services given via an apartment association to its members against maintenance charges up to Rs 7,500 per month per member are waived from GST, a limit that was raised from Rs 5,000 on the grounds of recommendations of the GST Council.
Under GST, apartment associations must register if their aggregate turnover surpasses Rs 20 lakhs (or ₹10 lakhs in special category States) in a fiscal year. They are simply needed to pay GST if the maintenance charge surpasses Rs 7,500 per month per member. The GST Council, a constitutional body that includes both central and state/UT representatives, stipulates GST rates and exemptions.
The Central Board of Excise and Customs so to address the concerns, has issued a circular dated July 22, 2019, citing all the aspects of the apartment maintenance charges under GST. On July 13, 2017, and February 7, 2018, the Ministry of Finance issued press releases to notify the public.
Read Also: GST on Apartment Maintenance Isn’t a New Levy
For residents or apartment associations, under the CGST law, there is no need to receive an official letter validating their GST status for the apartment, the Minister stated.
The government, concerning the penalties for non-compliance, provides a choice to the taxpayers to pay either no penalty or a reduced penalty if they file the due tax in a given period. She cited that via a notification, relief was given on October 8, 2024, permitting the taxpayers, including apartment associations, who received notices or orders under section 73 of the CGST Act for the period from July 1, 2017, to March 31, 2020, to file the tax payable with an exemption of interest or penalty until March 31, 2025.
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