GST on Apartment Associations: FM’s Clarification Explained
In a recent Parliament statement, Finance Minister Nirmala Sitharaman clarified the long-standing confusion regarding GST on apartment associations, particularly on monthly maintenance charges collected by Resident Welfare Associations (RWAs) or housing societies.
This blog simplifies the latest clarification, outlines the legal position, and answers common questions faced by apartment owners and managing committee members.
What Was the Confusion?
The core issue was around applicability of 18% GST on monthly maintenance contributions paid by members to apartment associations or RWAs. While CBIC had already issued Circular No. 109/28/2019-GST dated 22 July 2019, confusion persisted due to inconsistent interpretations at ground level.
FM Sitharaman’s Recent Clarification in Parliament
Statement: In the Rajya Sabha (July 2025 session), FM Nirmala Sitharaman reiterated that GST is payable only when two conditions are met:
- Monthly maintenance exceeds ₹7,500 per member, and
- The RWA/apartment association is registered under GST and crosses the aggregate turnover threshold (₹20 lakh in most cases).
If any one of the above is not satisfied, GST is not applicable.
Legal Reference:
CBIC Circular No. 109/28/2019-GST
Notification No. 12/2017-CT(Rate), Entry 77
GST on Apartment Associations: Key Conditions
| Particulars | GST Applicability |
|---|---|
| Monthly maintenance ≤ ₹7,500 | No GST |
| Monthly maintenance > ₹7,500 but RWA not registered | No GST |
| RWA registered, maintenance > ₹7,500 | GST at 18% on full amount |
| RWA registered, maintenance ≤ ₹7,500 | No GST |
| Maintenance from tenants (non-members) | GST applicable |
Note: The ₹7,500 limit is per flat. Splitting bills to stay under this limit is not allowed under GST law.
Legal Basis for GST on RWAs
- Section 9 of CGST Act, 2017: Enables levy of GST on taxable supplies
- Notification No. 12/2017-Central Tax (Rate): Grants exemption up to ₹7,500 per month per member
- CBIC Circular No. 109/28/2019-GST: Clarifies that if charges exceed ₹7,500, GST is applicable on the entire amount, not just the excess
Common Misconceptions Busted
- “Only the excess over ₹7,500 is taxed” – False
GST applies on the entire amount, not just the difference. - “GST applies even if RWA not registered” – False
GST is not applicable if RWA is not required to register. - “Rent paid to housing society also attracts GST” – Depends
If the rental income is commercial or from non-members, it may attract GST.
Practical Tip from Experts
Apartment associations should not register for GST unless required. Voluntary registration may increase compliance burden and liability, especially where monthly collections are marginally above ₹7,500.
If turnover is below threshold, better to avoid registration and remain exempt from GST entirely.
FAQs on GST for Apartment Associations
Q1. Can RWAs collect ₹7,499 and stay GST-free?
Yes. But deliberate underbilling may attract scrutiny.
Q2. Is GST applicable on sinking fund or corpus charges?
If charged monthly and exceed ₹7,500 in total, yes. But one-time corpus may not be liable, depending on the structure.
Q3. Can GST registration be cancelled to avoid tax?
Only if total turnover is below ₹20 lakh and other conditions are met. Otherwise, cancellation won’t avoid liability.
Final Thoughts
FM Sitharaman’s clarification brings welcome relief and certainty on GST for apartment associations. The ₹7,500 threshold remains the key compliance marker. Societies must assess:
- Total collection per flat
- Registration status
- Nature of charges (monthly vs. one-time)
For tailored GST registration or filing support, Efiletax can help your apartment association stay compliant without overpaying.
Summary
GST on apartment associations applies only if monthly charges exceed ₹7,500 and the association is GST-registered. FM Sitharaman clarified this in Parliament, aligning with CBIC’s 2019 circular. Avoid voluntary GST registration unless needed—doing so may attract avoidable tax on housing society maintenance bills.