As the GST regime gets enacted from July 1, 2017 flat owners will have to pay about 2.5% additional tax on maintenance charges. Only the owners paying maintenance charge above than Rs 5,000 will have to pay the increased amount of tax excluding property tax, stamp duty, electricity and water charges. Under GST, the existing rate of 15.55% on maintenance charges will be replaced by 18%. The new rate is also applicable to housing societies that have an annual corpus or balance of more than Rs 20 lakh, again, excluding property tax, stamp duty, electricity charges, water charges, and also maintenance charges gathered from apartment owners. There’s a sign of relief as the materials, such as cement, steel or paint, are purchased for the repair, renovation or maintenance of flats or the society’s premises, the tax paid on such material will be deducted from the overall tax paid under GST.
The housing societies will see the major impact because of the GST enactment. Though the prime focus is on making housing more and more affordable, additional taxes like such aren’t good news for new buyers. This change is likely to apply pressure on the residents living in societies. Though GST has its numerous positive sides there is also a flip side to it. Hopefully, the overall economy grows and the impact gets reduced.