1. yes, you are required to pay GST on this also as the same is being provided towards a service
this is right that the builder will transfer the entire fund to the corpus of the society once the society is formed.
Regards
Does advance maintenance taken by builder before forming a society attract GST?
Hello, I have a flat in an apartment who is not yet registered as a society but the builder is taking advance maintenance for 2 years before possession. Does this money attract 18% GST? The builder maintains a Separate Account for Maintenance and its GST activities and promises to give the entire details once the society is formed and handed over. Please Explain
Asked 6 years ago in Taxation
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13 Answers
maintenance charges paid to builder attract 18 per cent GST
2) GST is not applicable in Housing association or RWA when service charges do not exceed Rs 7500 /- per month or the total charges of the society do not exceeds 20 lakhs per annum. This exemption is given only when Cooperative society is rendering services to its members.
builder is not providing any services
he cannot be said to be giving any services to the flat buyers because the possession only is not handed
if the possession is not given, and the builder is collecting maintenance, and also charging GST on it, then whom is the builder providing services to? to some ghost?
it is the duty and obligation of the builder to maintain the property till its completely handed over to the society of flat buyers
before society is formed, it is the interest of the builder only which he is safeguarding by maintaining the property on which he has undertaken the project. Because if the property is well maintained then it will attract buyers
for that, he cannot burden the flat buyers by asking them to pay GST on the maintenance
also demanding advance maintenance is itself illegal before the possession
the builder is simply shifting his liability on the flat buyers
it is the builder who has to manage and maintain the property till possession with OC is given
You mean to say, builder asking for advance maintenance charge for 2 years. This is arbitrary if no advance agreement in this regard.
Monthly maintenance charges of housing societies upto Rs. 7500 have been exempted form GST. So even total for year can be any amount but per month less than 7500, GST not applicable.
Yes sir as maintaing society he is providing service same shall attract 18 percent GST and same has to be deposited with department.
No it's illegal to charge gst from you before possession and oc
Yes, GST is applicable on maintenance charges.
Maintenance charges were subject to the levy of service tax earlier, if the aggregate of the maintenance charges levied by the housing society exceeded Rs 10 lakhs in a financial year. Under the GST, this threshold limit has been raised to Rs 20 lakhs. So, a housing society will have to collect GST from its members, if the aggregate of the charges during a financial (whether subject to GST or not) exceeds Rs 20 lakhs.
The same is applicable to the builder as well, so you may fist ascertain the amount and talk to the builder about this.
The Builder has received OC and handed over the possession to us and the building is in the process of society formation. Yes, the Builder has already mentioned about the Advance Maintenance in the Registered Agreement. The Question is - During this intermediate phase he has collected Advance Maintenance on which he is asking for GST. He is ready to show the ledgers that he has paid the GST money on maintenance to the authorities. He says he is transparent and will hand over all the books along with receipts once the Society is Formed. Should I pay him the Maintenance money + GST ?
Asked 6 years ago
on maintenance collected by builder GST is payable
pay maintenance amount plus GST
i think either you have not read my response previously or have not understood what is stated in my previous response
prior to conveyance of land and building to society, it is the responsibility of the builder to maintain the project building and the constructions
while doing so, he is not providing any services to the flat buyers
so there is no question of charging any GST on the advance maintenance
there is a Bombay High Court judgment on this
but i am not keen to share it when the querist does not appreciate the response given by the lawyers here
builder can claim anything. But he still has to stick to the law
nowhere in your original query did you inform that possession was handed to you. It was only informed that society is not yet registered
I have nowhere stated that you should not pay the maintenance!!!
U have completely misread the response
Plz read it carefully
What I meant to say is that the flat buyer is not liable to pay any GST or service tax on the maintenance amount, since the property is not yet conveyed to society
That does not mean that the maintenance is not to be paid
18 percent GST is applicable on the maintenance amount, you should ask receipt and pay.
Whether your society aplies to get bracket. If he has already secured oc then why builder is claiming maintenance it's duty of society to do the same. Even a adhoc committe can do it during formation of society
If he is ready to cooperate then you may make the payment and take the possession