GST on society maintenance: the ₹7,500 rule explained
Many committees aren't sure whether GST applies to their maintenance bills. For most smaller societies it doesn't. Here is how the two limits work.
The two limits
Under GST, the services a society provides to its members are taxable, but contributions are exempt up to ₹7,500 per member per month when they are used for common purposes. In 2019 the CBIC clarified (Circular 109/28/2019-GST) that:
- If a member's maintenance is more than ₹7,500 a month, GST applies to the whole amount, not just the part above ₹7,500.
- A society only needs GST registration if its annual turnover is more than ₹20 lakh. Below that, no GST is charged even on bills above ₹7,500.
- Where one person owns two flats, the ₹7,500 limit applies to each flat separately.
So GST applies only when both are true: the society's turnover is over ₹20 lakh, and a member's monthly maintenance is over ₹7,500. The rate is 18%.
Example
A society of 100 flats charges ₹8,000 a month. Its turnover is ₹8,000 × 12 × 100 = ₹96 lakh, above ₹20 lakh, and each bill is above ₹7,500. GST at 18% is ₹1,440 a month on each bill, making it ₹9,440.
A society of 30 flats charging ₹8,000 a month has a turnover of ₹28.8 lakh, so it is also above ₹20 lakh and GST applies. At ₹5,000 a month, the same society charges no GST, because no bill is above ₹7,500.
Things to check with your CA
- Which amounts count: sums the society only collects and passes on, like property tax or a member's own electricity bill, are often treated separately.
- Input tax credit on GST the society pays to its vendors (security agency, lift maintenance) once registered.
- Any change in the rules after this guide was written.
How myNest helps
myNest keeps charge heads separate on every bill, so it is easy to show your CA what was collected for what. Reports export to CSV for your accountant.
This guide is general information, not legal or tax advice. Your society's registered bye-laws and your chartered accountant have the final word.
Frequently asked questions
Our maintenance is ₹7,000. Do we charge GST?
No. Below ₹7,500 per member per month, maintenance is exempt.
Is GST charged only on the amount above ₹7,500?
Under CBIC's 2019 circular, once the limit is crossed GST applies to the whole amount. Ask your CA about any later changes or court rulings.
Do small societies need GST registration?
Not if the society's annual turnover is ₹20 lakh or less.