NEW DELHI: Union Finance Minister Nirmala Sitharaman has clarified that residents of smaller apartments with maintenance charges below 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 came in response to a Lok Sabha Question raised by members -- Manickam Tagore B and Suresh Kumar Shetkar.
The Minister's statement, laid on the Table of the House, emphasised that GST compliance requirements, if any, are placed on apartment associations as service providers, not on individual residents. Services provided by an apartment association to its members against maintenance charges up to Rs 7,500 per month per member are exempt from GST, a limit that was increased from Rs 5,000 based on recommendations from the GST Council.
Apartment associations are only required to register under GST if their aggregate turnover exceeds Rs 20 lakhs (or ₹10 lakhs in special category States) in a financial year. Even then, they are only required to pay GST if the maintenance charged is more than Rs 7,500 per month per member. The GST Council, a constitutional body comprising both central and state/UT representatives, prescribes GST rates and exemptions.
To address concerns and provide clarity, the Central Board of Excise and Customs issued a circular on July 22, 2019, clarifying all relevant aspects of apartment maintenance charges under GST. Additionally, the Ministry of Finance issued press releases on July 13, 2017, and February 7, 2018, to inform the public.
The Minister also confirmed that there is no requirement under CGST law for residents or apartment associations to obtain an official letter confirming their apartment's GST status.
Regarding potential penalties for non-compliance, the government provides options for taxpayers to pay either no penalty or a reduced penalty if they pay the due tax within a specified period. She further informed that relief was provided through a notification dated October 8, 2024, allowing 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 pay the tax payable with a waiver of interest or penalty until March 31, 2025.