Apartment maintenance charges are one of the most common recurring expenses paid by flat owners and residents. 

However, the applicability of Goods and Services Tax (GST) on these charges continues to create confusion among Resident Welfare Associations (RWAs), apartment owners, and builders. 

Questions such as whether GST applies only when maintenance exceeds ₹7,500 per month, whether GST is payable on the excess amount or the entire amount, and how the rules differ for builders and RWAs frequently arise.

This article explains the complete legal framework governing GST on apartment maintenance charges.

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What Are Apartment Maintenance Charges?

Apartment maintenance charges are monthly contributions collected from residents or apartment owners for the upkeep and management of common facilities in a residential complex. These generally include:

• Security services
• Housekeeping and sanitation
• Lift maintenance
• Common electricity expenses
• Water supply
• Gardening
• Repairs and maintenance
• Clubhouse and common amenities
• Administrative expenses

These charges are usually collected by a Resident Welfare Association (RWA), Cooperative Housing Society, Apartment Owners’ Association, or, before handover, by the builder or developer.

Is GST Applicable on Apartment Maintenance Charges?

Yes, GST may apply, but only when specified conditions are fulfilled.

Under GST law, services provided by a Resident Welfare Association (RWA) to its members are exempt up to a prescribed threshold under Entry 77 of Notification No. 12/2017-Central Tax (Rate). The Government has clarified the applicability through CBIC Circular No. 109/28/2019-GST dated 22 July 2019. 

Conditions for GST Exemption

Maintenance charges remain exempt only when both the following conditions are satisfied:

1. Monthly Maintenance Does Not Exceed ₹7,500 Per Apartment

The monthly contribution collected from each member for one residential apartment should not exceed ₹7,500.

2. Annual Turnover of the RWA Does Not Exceed ₹20 Lakh

The Resident Welfare Association’s aggregate turnover during the financial year should not exceed the GST registration threshold of ₹20 lakh.

If these conditions are met, no GST is payable on maintenance charges. 

When Does GST Become Applicable?

GST at 18% becomes payable when:

• The RWA’s annual aggregate turnover exceeds ₹20 lakh; and
• Monthly maintenance charges exceed ₹7,500 per apartment.

Only when both conditions are satisfied does GST become applicable. 

Is GST Payable on the Entire Amount or Only the Excess?

This has been one of the most debated issues.

CBIC’s Position

The CBIC clarified through Circular No. 109/28/2019-GST that once monthly maintenance exceeds ₹7,500, GST is payable on the entire maintenance amount, not merely on the amount exceeding ₹7,500.

For example:

The circular specifically illustrates that where maintenance is ₹9,000, GST is payable on the full ₹9,000 and not merely on ₹1,500. 

Important Judicial Development

The issue has witnessed judicial scrutiny.

The Madras High Court, in the Greenwood Owners Association case, held that GST should apply only on the amount exceeding ₹7,500. However, the CBIC circular continues to state that the entire amount becomes taxable once the threshold is crossed. The High Court ruling is binding within its territorial jurisdiction, while the CBIC circular continues to guide tax administration elsewhere unless the Supreme Court settles the issue. 

Supreme Court Position: No Final Verdict Yet on GST Threshold for RWA Maintenance Charges

As of August 2026, the Supreme Court has not delivered a final judgment on the issue of whether GST is payable on the entire maintenance amount or only on the amount exceeding ₹7,500 per month collected by Resident Welfare Associations (RWAs).

The controversy arose after the CBIC, through Circular No. 109/28/2019-GST dated 22 July 2019, clarified that once monthly maintenance charges exceed ₹7,500 per member, GST becomes payable on the entire amount. This interpretation was challenged before the Madras High Court. 

Madras High Court Struck Down CBIC Circular

In Greenwood Owners Association & Others v. Union of India (2021), the Madras High Court held that the CBIC circular was contrary to the exemption notification.

The Court observed that:

• The exemption of ₹7,500 is a threshold exemption.
• GST should apply only on the amount exceeding ₹7,500, and not on the entire maintenance contribution.
• Consequently, the Court quashed the Advance Ruling as well as Circular No. 109/28/2019-GST to the extent they required taxation of the entire amount once the threshold was crossed. 

Illustration

If monthly maintenance is:

• ₹7,500 → No GST
• ₹8,500 → According to the Madras High Court, GST is payable only on ₹1,000.
• Under the CBIC Circular, GST would have been payable on the entire ₹8,500.

Supreme Court Decision Relevant to RWAs: Doctrine of Mutuality

Although there is no Supreme Court judgment directly deciding the ₹7,500 threshold issue, the Supreme Court has delivered an important judgment affecting housing societies and resident associations.

In State of West Bengal v. Calcutta Club Ltd. (2019), the Supreme Court held that under the pre-GST service tax regime, transactions between a members’ club or association and its members were governed by the doctrine of mutuality, meaning an association and its members were not distinct persons. Consequently, service tax could not be levied on such mutual transactions. This principle has been relied upon by tribunals while deciding pre-GST disputes involving RWAs. 

However, the GST regime introduced Section 7(1)(aa) of the CGST Act (inserted retrospectively), deeming supplies by clubs, associations and RWAs to their members as taxable supplies. As a result, the Calcutta Club ruling does not govern GST liability under the amended GST law, though it remains relevant for pre-GST periods. 

Current Legal Position

Today, the legal position may be summarized as follows:

• CBIC’s view: If maintenance exceeds ₹7,500 per month per apartment, GST is payable on the entire amount.
• Madras High Court’s view: GST is payable only on the amount exceeding ₹7,500.
• Supreme Court: There is no authoritative judgment yet resolving this conflict under the GST regime.

Accordingly, while the Madras High Court decision provides persuasive guidance and is binding within its territorial jurisdiction, taxpayers in other jurisdictions should be mindful that the CBIC circular continues to reflect the department’s administrative position until the issue is conclusively settled by the Supreme Court or through legislative clarification. 

GST Rate on Apartment Maintenance

The applicable GST rate is:

18%

The rate comprises:

• CGST – 9%
• SGST – 9%

or

• IGST – 18%

where applicable.

What If a Person Owns Multiple Flats?

Where a person owns two or more apartments in the same housing society, the exemption limit of ₹7,500 is applied separately to each apartment.

Example:

• Flat A Maintenance: ₹7,500
• Flat B Maintenance: ₹7,500

Both remain exempt.

However,

• Flat A Maintenance: ₹8,000
• Flat B Maintenance: ₹7,000

The GST implications will be examined separately for each apartment. 

Can RWAs Claim Input Tax Credit (ITC)?

Yes.

Registered RWAs paying GST can claim Input Tax Credit on GST paid on various inputs and input services used for providing maintenance services.

This includes GST paid on:

• Lift maintenance
• Security services
• Housekeeping contracts
• Plumbing
• Electrical repairs
• Water pumps
• DG sets
• Gardening
• Hardware purchases
• Sanitation materials

Such ITC can be utilised for payment of GST liability. 

GST During Builder Maintenance Period

The exemption available to Resident Welfare Associations does not automatically extend to builders or developers maintaining the project before handing over management to the RWA.

Maintenance collected by the builder is generally treated as consideration for supply of services by the builder and is ordinarily liable to GST according to the applicable provisions. Consequently, buyers often find GST charged on maintenance collected before formation or takeover by the RWA. 

Common Misconceptions

Myth 1: GST applies if maintenance exceeds ₹7,500.

Reality: The RWA’s annual turnover must also exceed ₹20 lakh.

Myth 2: GST is payable only on the excess over ₹7,500.

Reality: According to the CBIC circular, GST applies to the entire amount once the threshold is crossed, though the Madras High Court has taken a different view. 

Myth 3: Every apartment society must register under GST.

Reality: Registration depends upon the statutory turnover threshold.

Myth 4: Every maintenance bill attracts GST.

Reality: Many residential societies remain outside GST because they satisfy the exemption conditions.

Practical Examples

Compliance Requirements for RWAs

Where GST is applicable, the RWA should:

• Obtain GST registration.
• Issue GST-compliant tax invoices.
• File periodic GST returns.
• Maintain proper books of account.
• Pay GST within prescribed timelines.
• Avail eligible Input Tax Credit wherever permissible.

Key Takeaways

• Apartment maintenance charges are not automatically taxable under GST.
• The exemption generally depends on both the monthly maintenance threshold of ₹7,500 per apartment and the RWA crossing the applicable registration turnover threshold. 
• The applicable GST rate is 18% where the levy applies.
• The CBIC maintains that GST is payable on the entire maintenance amount once the threshold is exceeded, while the Madras High Court has held that only the excess should be taxed, creating a significant interpretational issue pending authoritative resolution. 
• Builders collecting maintenance before the RWA takes over are generally subject to a different GST treatment than registered RWAs.

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