Synopsis : Union Finance Minister Nirmala Sitharaman clarified that residents of smaller apartments paying maintenance charges under ?7,500 per month are exempt from GST. Apartment associations only face GST obligations if turnover exceeds ?20 lakh and charges exceed the threshold.
In a welcome move for middle-class homeowners, Union Finance Minister Nirmala Sitharaman has clarified that GST will not apply to residents of smaller apartments paying monthly maintenance charges below ?7,500. The clarification came during a Lok Sabha session in response to questions raised by MPs Manickam Tagore B and Suresh Kumar Shetkar.
The Minister stated that GST compliance burdens, if any, fall not on individual residents but on apartment associations, and only under certain conditions. Specifically, these associations are required to register for GST only if their aggregate turnover exceeds ?20 lakh in a financial year (?10 lakh for special category states). Even then, GST applies only if the monthly maintenance fee per member exceeds ?7,500.
This exemption limit was previously ?5,000 but was raised to ?7,500 following the GST Council’s recommendation. The GST Council—a constitutional body comprising representatives from the Centre and states—sets rates and exemptions under the GST framework.
To eliminate confusion, the Central Board of Excise and Customs (CBEC) had already issued a detailed circular on July 22, 2019, addressing GST obligations of apartment associations. Additionally, public notices issued in 2017 and 2018 had earlier outlined similar clarifications.
Importantly, the Finance Minister also confirmed that there is no legal requirement for either residents or apartment associations to obtain an official letter certifying their GST exemption status.
Addressing concerns on non-compliance, Sitharaman added that the government has offered relief to taxpayers. As per a notification dated October 8, 2024, apartment associations who were issued tax notices under Section 73 of the CGST Act for the period July 1, 2017, to March 31, 2020, can pay their dues without penalty or interest until March 31, 2025.
This clarification is expected to ease compliance pressure on smaller residential complexes and eliminate unnecessary confusion for thousands of apartment owners across India.
Disclaimer : This article is for general informational purposes only and should not be considered legal or tax advice. For specific guidance, please consult a qualified tax professional or chartered accountant.
