FM Nirmala Sitharaman Clarifies GST on Apartment Associations: No Tax Burden for Residents
FM clarified in the Lok Sabha on July 28 that apartment residents are not required to pay GST, as the tax applies only to associations under specific conditions
Finance Minister Nirmala Sitharaman has made it clear that people living in apartment complexes do not need to worry about paying Goods and Services Tax (GST) directly. She gave this clarification in the Lok Sabha on Monday, July 28, during a written reply to a question raised in Parliament.Planning smarter for FY 2025–26? Don’t miss this trusted guide used by thousands of tax...
Finance Minister Nirmala Sitharaman has made it clear that people living in apartment complexes do not need to worry about paying Goods and Services Tax (GST) directly. She gave this clarification in the Lok Sabha on Monday, July 28, during a written reply to a question raised in Parliament.
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According to the Minister, GST applies only when two specific conditions are met. First, the apartment association’s total yearly income from maintenance and other services must be more than Rs. 20 lakh. In special category states, this limit is Rs. 10 lakh. Second, GST is only charged if the monthly maintenance fee paid by each flat owner is above Rs. 7,500.
If the maintenance fee is Rs. 7,500 or less, or if the total income of the association is below the limit, there is no need to register for GST and no GST has to be paid. “There is no tax compliance for the residents. Only the apartment associations need to pay, as they are the ones providing services,” the Minister explained.
She further clarified that no GST rules place any kind of tax responsibility on the individual apartment residents. “No GST compliance requirements have been placed upon the residents of apartments, irrespective of the monthly maintenance amount paid,” she added.
Earlier, services offered by apartment associations were tax-free if the maintenance fee was up to Rs. 5,000 per month. This exemption limit was increased to Rs. 7,500 per month per flat from January 18, 2018, based on recommendations made by the GST Council in its 25th meeting. If the fee goes over Rs. 7,500, GST is charged at the rate of 18 percent.
To help people understand these rules better, Sitharaman said the government holds regular workshops, information sessions, and awareness drives through GST facilitation centres. These efforts aim to guide taxpayers and ensure correct tax payments.
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