GST on society maintenance: how the ₹7,500 a month limit works, and the whole-bill dispute

Rules and rates as of 20 October 2026.

If your monthly maintenance bill has crept past ₹7,500, you may have seen a new line on it: GST at 18%. Whether that line is right depends on two tests, on how your society counts the bill, and on a point where the tax department and a High Court disagree. This explainer goes through the exemption itself, the official clarification, the court ruling against it, and the arithmetic for a typical flat.

Where the ₹7,500 comes from

The exemption sits in serial number 77 of Notification No. 12/2017-Central Tax (Rate), dated 28 June 2017, the main list of services exempt from GST. As reproduced in a 2024 West Bengal advance ruling, entry 77 covers a service "by an unincorporated body or a non-profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution". Clause (c) sets the limit: "up to an amount of seven thousand five hundred rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex". The rate against it is "Nil".

The limit was ₹5,000 until Notification No. 2/2018-Central Tax (Rate) raised it to ₹7,500 from 25 January 2018, according to the Central Board of Indirect Taxes and Customs (CBIC).

Three words in that entry do a lot of work. "Members" means the exemption covers what the society or resident welfare association (RWA) charges its own members. "Reimbursement or share of contribution" means it covers pooled running costs. And "from a third person for the common use" points to the usual bills: security, housekeeping, lift upkeep, common electricity.

The two tests in CBIC's circular

CBIC Circular No. 109/28/2019-GST, dated 22 July 2019, answers the common questions. Its answers set two conditions, and GST applies only when both are met:

• The member's charge is above ₹7,500 a month.
• The society's annual turnover is ₹20 lakh or more. Below "Rs.20 Lakh in a financial year", the circular says the RWA need not register or pay GST even if some members pay more than ₹7,500.

The circular adds two practical points. If you own two or more flats, the ceiling applies "separately for each residential apartment owned by him". And an RWA can take input tax credit on GST it pays for capital goods "(generators, water pumps, lawn furniture etc.)", goods such as taps and pipes, and input services such as repair and maintenance.

The West Bengal Authority for Advance Ruling, in Fortune Estates Association of Apartment Owners (Order No. 05/WBAAR/2024-25, 29 July 2024), added one more: the test is per member. A member paying ₹7,000 stays exempt even if a neighbour pays ₹9,000 and the society's turnover is above ₹20 lakh. An advance ruling is given to the applicant that asked for it, so treat it as an indication, not a rule for every society.

The conflict: whole bill or only the excess?

This is where the sources part ways.

The circular's view. Question 5 says that if charges exceed ₹7,500 a month per member, "the entire amount is taxable". Its own example: on ₹9,000 a month, "GST @18% shall be payable on the entire amount of Rs. 9000/- and not on [Rs. 9000 - Rs. 7500] = Rs. 1500/-".

The Madras High Court's view. In Greenwood Owners Association v. Union of India (W.P. Nos. 5518 and 1555 of 2020 and 27100 and 30004 of 2019, order of 1 July 2021), Justice Anita Sumanth read "up to" as a ceiling. She held that a Tamil Nadu advance ruling and "the Circular to the effect that any contribution above Rs.7,500/- would disentitle the RWA to exemption" are "contrary to the express language of the Entry in question and both stand quashed". In her words, "it is only contributions to RWA in excess of Rs.7,500/- that would be taxable".

We could not find on any official page whether the Union appealed that order or what became of an appeal. The circular, including its question 5, is still posted on CBIC's GST website. So which reading your society follows may depend on your state and on advice from its own chartered accountant.

Worked example

Take a 40-flat society where each flat pays ₹9,000 a month. All figures are illustrative.

Turnover test: 40 × ₹9,000 × 12 = ₹43,20,000 a year, above ₹20 lakh. Per-member test: ₹9,000 is above ₹7,500. Both conditions are met.

• Circular reading: GST = 18% × ₹9,000 = ₹1,620 a month, or ₹19,440 a year.
• Greenwood reading: GST = 18% × (₹9,000 − ₹7,500) = 18% × ₹1,500 = ₹270 a month, or ₹3,240 a year.
• Difference: (₹1,620 − ₹270) × 12 = ₹16,200 a year per flat.

Situation	Monthly bill	GST a month, circular	GST a month, Greenwood
Large society, bill at or under the limit	₹7,000	Nil	Nil
Bill exactly at the limit	₹7,500	Nil	Nil
Bill above the limit, turnover ₹20 lakh or more	₹9,000	₹1,620	₹270
Bill above the limit, turnover ₹20 lakh or more	₹12,000	₹2,160	₹810
20-flat society at ₹8,000 (turnover 20 × ₹8,000 × 12 = ₹19,20,000)	₹8,000	Nil (turnover under ₹20 lakh)	Nil

Note that the gap between the two readings is the same ₹1,350 a month (18% × ₹7,500) whatever the bill, as long as it is above the limit.

What counts towards the ₹7,500

This is the least settled part. Neither the circular nor the West Bengal ruling says whether sinking fund contributions, property tax, or water and electricity charges the society merely passes on are added to the ₹7,500. The circular does not mention property tax, electricity or "pure agent" collections at all. We saw reports of advance rulings on items such as a corpus fund, but did not read an official text that settles what goes into the ₹7,500. If your society adds everything into one figure and charges GST on the total, ask its accountant which items were counted and why.

Did the 2025 GST changes touch this?

The GST rate changes that took effect on 22 September 2025 amended the services exemption list through Notification No. 16/2025-Central Tax (Rate), dated 17 September 2025. On the copy we read, that notification changed entries on delivery services and insurance and inserted new ones, but did not touch serial number 77. We read it on a private site, not CBIC's, and could not check later notifications, so the editor should confirm the ₹7,500 limit and the 18% rate still stand.

Questions to ask your society

• Is the society registered for GST, and what was its turnover last year?
• Is GST charged on the whole bill or only above ₹7,500, and on what advice?
• Which items were added up to reach the figure compared with ₹7,500?
• If you own two flats, is each flat billed and tested separately?

A chartered accountant can answer these for your society's facts. This explainer is not tax advice.