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Saturday, May 27, 2017

YOUR FLAT MAINTENANCE CHARGES WILL GO UP FROM JULY WHEN GST KICKS IN

GST means 2.5% more tax on a flat's maintenance charge

By Chittranjan Tembekar
, TNN|
May 27, 2017, 02.21 PM IST



Once the GST regime rolls in on July 1, apartment owners will have to pay about 2.5% additional tax on maintenance charges. The tax is applicable on flat owners who pay a maintenance charge of above Rs 5,000, excluding property tax, stamp duty, and 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 on housing societies that have an annual corpus or balance of more than Rs 20 lakh,again, excluding property tax, stamp duty, and electricity and water charges, and also maintenance charges gathered from apartment owners. 



There's another exception: if material, such as cement, steel or paint, is bought 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. 

To avail of the adjustment, first GST needs to be paid, and then a credit claimed, said an expert. 

In the outgoing tax regime, these conditions were the same. Whereas under GST there will be a flat 18% tax, under the outgoing regime the division was 15% service tax, 0.5% Swachh Bharat tax, and 0.05% non-agriculture tax, totalling 15.55%. Another difference is that while one annual return needed to be filed under the outgoing regime, at least 37 need to be filed under GST. 
Housing societies say GST's main effect will be felt on society corpuses. Animesh Phadnis, a member of Samarth Society , Mulund, said that the additional taxation works out to a neat amount that societies stand to lose. "Already, due to a delay in conveyance deeds (handing over of land ownership from builder to society), additional stamp duty is paid. The new burden will create further pressure on a society's corpus."




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