GST on RWA and society maintenance charges
When a residential welfare association or group housing society has to charge GST on monthly maintenance: the Rs 7,500 per member and Rs 20 lakh turnover tests, what Circular 109/28/2019-GST clarifies, flats owned by one member, input tax credit and TDS on contractors.
Published by SKAG and Associates · Page maintained by CA Gaurav Singh (ICAI M.No. 539050) · Last updated: 30 October 2026
Note: General information on the law as at 30 October 2026. Some points below are interpretations on which views differ; they are marked. This is not a substitute for professional advice.
Residential welfare associations and cooperative group housing societies collect monthly contributions from members to run lifts, security, housekeeping, gardens and common electricity. GST treats this as a supply by the association to its members. Most small and mid-sized societies pay no GST because of an exemption with two limits, which CBIC explained in a circular of 22 July 2019.
The exemption: Rs 7,500 per month per member
Clause (c) of entry 77 of Notification 12/2017-Central Tax (Rate) exempts the supply of services by an unincorporated body or a non-profit entity registered under any law to its own members, by way of reimbursement of charges or share of contribution, up to Rs 7,500 per month per member, for providing services and goods for the common use of its members in a housing society or residential complex. The limit was Rs 5,000 until 24 January 2018 and was raised to Rs 7,500 from 25 January 2018 by Notification 2/2018-Central Tax (Rate).
The Rs 20 lakh turnover test
The circular adds that an RWA whose aggregate turnover in a financial year does not exceed Rs 20 lakh need not register or pay GST, even if its maintenance charges exceed Rs 7,500 per month per member. GST is payable only where both limits are crossed:
| Annual turnover of the RWA | Monthly maintenance per member | Exempt? |
|---|---|---|
| More than Rs 20 lakh | More than Rs 7,500 | No (18% on the whole charge) |
| More than Rs 20 lakh | Rs 7,500 or less | Yes |
| Rs 20 lakh or less | More than Rs 7,500 | Yes |
| Rs 20 lakh or less | Rs 7,500 or less | Yes |
Table as in Circular 109/28/2019-GST. Aggregate turnover counts exempt supplies too (Section 2(6) of the CGST Act), so a large society can cross Rs 20 lakh on exempt maintenance alone; that matters if it also has taxable income such as hall bookings or rent from a mobile tower (CA view needed on the facts).
What Circular 109/28/2019-GST clarifies
- No splitting of the charge: if maintenance is above Rs 7,500 a month, the entire amount is taxable. The circular’s example: on Rs 9,000 a month, GST at 18% is payable on Rs 9,000, not on Rs 1,500.
- Members with more than one flat: the member is treated as a member for each flat, and the Rs 7,500 ceiling applies separately to each residential apartment. Two flats at Rs 7,500 each stay exempt.
- Input tax credit: an RWA paying GST can take credit on capital goods (generators, water pumps, lawn furniture), goods (taps, pipes, sanitary and hardware fittings) and input services such as repair and maintenance.
In 2021 the Madras High Court read down the “entire amount” clarification in a case brought by owners’ associations, holding that only the excess over Rs 7,500 is taxable. Circular 109/28/2019-GST remains the department’s published clarification, and how far the judgment applies outside that case depends on the facts, so the position for a particular society should be settled before relying on either view.
Points the circular does not settle (CA view needed)
- Sinking fund and repair fund: the circular does not mention them. Whether contributions to a sinking or major repairs fund count towards the Rs 7,500 a month depends on how they are collected and used; many advisers treat regular monthly contributions as part of the charge.
- Commercial units: the exemption speaks of common use of members in a housing society or residential complex. Shops or offices in a mixed complex may not get it.
- Quarterly or annual billing: the limit is a monthly figure, so charges billed for a quarter or a year are usually compared with Rs 7,500 for each month covered.
- Charges collected for others: amounts such as property tax or electricity passed on at actual cost may be treated differently from maintenance.
TDS by societies on contractors
A society that pays contractors for security, housekeeping, lift maintenance or repairs is generally a person who must deduct income tax at source on contract payments: under Section 194C of the Income-tax Act, 1961 for payments up to 31 March 2026, and under Section 393 of the Income-tax Act, 2025 from 1 April 2026. That needs a TAN, monthly deposit by the 7th and quarterly TDS statements (Form 140 from Tax Year 2026-27). Fees for professional services, such as an auditor’s, have their own TDS entry. Check the thresholds and rates for each payment in the TDS guide.
Group housing societies in Dwarka
Much of Dwarka’s housing is in cooperative group housing societies (CGHS) registered with the Registrar of Cooperative Societies, Delhi, many with several hundred flats. In such a society, maintenance of Rs 4,000 a flat across 400 flats is Rs 1.92 crore a year, far above Rs 20 lakh, yet the maintenance stays exempt because each flat is within Rs 7,500. The questions that usually come up are the treatment of other receipts, such as community hall bookings, parking and telecom tower rent, and the TDS on contractor payments.
Frequently Asked Questions
Is GST payable on society maintenance of Rs 7,500 a month?
No. Under clause (c) of entry 77 of Notification 12/2017-Central Tax (Rate), contributions by members to a residential welfare association of up to Rs 7,500 per month per member, for goods and services for their common use, are exempt. GST arises only above Rs 7,500, and only if the association’s aggregate turnover also crosses Rs 20 lakh.
If maintenance is Rs 9,000, is GST charged only on Rs 1,500?
According to Circular 109/28/2019-GST, no: once the charge exceeds Rs 7,500 per month per member, GST at 18% is payable on the entire Rs 9,000. A 2021 Madras High Court judgment took a different view of this point, so a society should settle which view it follows on its own facts before collecting GST.
I own two flats in the same society. Is the limit Rs 7,500 for both together?
No. The circular says the Rs 7,500 ceiling applies separately to each residential apartment. An owner paying Rs 7,500 for each of two flats is within the exemption for both.
Does a society with Rs 20 lakh or less of turnover need GST registration?
No. The circular confirms that an RWA whose aggregate turnover in the financial year does not exceed Rs 20 lakh need not register or pay GST, even if some members pay more than Rs 7,500 a month.
Can the RWA claim input tax credit?
Yes, where it pays GST on taxable maintenance. The circular names capital goods such as generators, water pumps and lawn furniture, goods such as taps and pipes, and input services such as repair and maintenance. Credit relating to exempt supplies has to be reversed under the usual rules.
Does the society have to deduct income tax from contractors?
Generally yes. A society that pays security, housekeeping or repair contractors above the thresholds deducts TDS on contract payments (Section 194C of the 1961 Act up to 31 March 2026; Section 393 of the Income-tax Act, 2025 from 1 April 2026), which needs a TAN and quarterly TDS statements. The thresholds and rates for each type of payment are in the TDS guide on this site.