18% GST on Apartment Maintenance Over ₹7,500 Sparks Panic Among Residents

A revised tax rule under the Union Budget 2025-26 has triggered anxiety among apartment dwellers across Karnataka. Housing societies, which charge ₹7,500 or more as maintenance or collect more than ₹20 lakh a year, are now required to pay 18% GST, generating debate and confusion among residents. According to experts, nearly 50 lakh apartment residents reside only in Bengaluru, and 40 lakh are spread across cities like Mysuru, Mangaluru, Hubballi, and Belagavi. With apartment living being the norm in urban India, this tax decision could impact a vast section of the population.

The key GST triggers are clear: if monthly maintenance crosses ₹7,500, or the total collections in a financial year exceed ₹20 lakh even for one-off expenses like lift replacements or painting the society enters the GST net. And the compliance is anything but light.

“People think the GST rate is 5%, but it’s 18%,” said a tax expert. “If a society collects ₹20 lakh annually, it ends up paying ₹3.6 lakh in GST. Over a decade, that’s ₹36 lakh not including ₹1–2 lakh more annually for auditor fees and compliance costs.”

Chartered Accountant Sanjay Dhariwal noted that while apartment associations can claim input tax credits, compliance becomes a monthly task. “Once you’re registered, you must file two monthly returns on the 11th and 20th plus an annual return. Even if your society isn’t registered with the Cooperative department, GST applies if the financial threshold is met,” he clarified.

The rule has thrown residents into a flurry of meetings and WhatsApp discussions, trying to determine if registration is required. Those unsure can pay ₹500 and visit the local Commercial Tax office to get an official letter confirming their GST applicability.

With penalties looming for non-compliance, experts urge societies to streamline their finances and consult professionals. GST on housing maintenance is no longer optional and the red tape is real.