Finance Minister Nirmala Sitharaman clarified in Parliament on Monday that apartment associations are required to register under GST if their aggregate turnover exceeds Rs 20 lakh (Rs 10 lakh in special category states) in a financial year and the associations are required to pay GST only where the maintenance charged is more than Rs 7,500 per month per member.
The Finance Minister further stated that apartment associations having maintenance charges up to Rs 7,500 per month per member or having aggregate turnover of goods and services below the threshold need not be registered under GST.
The residents staying in the apartments do not have to pay GST. It is only the apartment associations that have to pay as they are the supplier of services, the Finance Minister said in a written reply in the Lok Sabha.
“No GST compliance requirements have been placed upon the residents of apartments, irrespective of the monthly maintenance amount paid,” she added.
Initially, services by an apartment association to its resident members against maintenance charges up to Rs. 5,000 per month were exempt. However, the exemption limit was enhanced to Rs. 7,500 per month per member in accordance with the recommendations of the GST Council in its 25th meeting held on January 18, 2018, the Finance Minister said.
The services by an apartment association to its own resident members, where the maintenance charges are greater than Rs 7,500, are taxed at the rate of 18 per cent on the recommendations of the GST Council.
The limit of Rs 7,500 was also prescribed on the recommendations of the GST Council in its 25th meeting, in which a decision was taken to increase the limit from the previous level of Rs 5,000 per person per member.
Sitharaman also said that if any due tax has not been paid under the GST Act, the taxpayers are provided with an option to pay either no penalty or reduced penalty, provided they are ready to pay the due tax within a specified time period.
She also said that events like Taxpayer Samvad, workshops, and awareness programs are regularly being organised for information dissemination and awareness through GST facilitation centres. These initiatives are designed to help taxpayers accurately assess their tax liability. Further, there is no requirement under CGST law to obtain any official letter from the resident or apartment associations regarding their apartment’s GST status.
