With apartments now the primary mode of urban living, residents across Karnataka are grappling with the implications of a recent move by the government to impose an 18% Goods and Services Tax (GST) on monthly maintenance charges exceeding ₹7,500. The GST also applies if a housing society’s total annual collection surpasses ₹20 lakh — even if the amount was collected for occasional large expenses like repainting or lift replacements. In cities like Bengaluru, which houses over 50 lakh apartment dwellers, and others like Mysuru, Mangaluru, Hubballi, and Belagavi, panic has set in. WhatsApp groups are buzzing, and emergency meetings are being called as residents debate whether their societies need to register under GST.
Once registered, societies must file two returns every month — on the 11th and 20th — and an annual return, drastically increasing the compliance burden. Many residents initially assumed the tax rate would be 5%, but the reality is a steep 18%. For societies collecting ₹20 lakh annually, this translates to ₹3.6 lakh in GST per year — a staggering ₹36 lakh over a decade. Add to that compliance costs of ₹1–2 lakh per year for hiring auditors and ensuring statutory filings, and the financial pressure becomes even more intense.
Chartered accountant Sanjay Dhariwal explained that while apartment associations can claim input tax credit, once registered, they must maintain strict monthly compliance. He also noted that GST applies even if a society isn’t registered with the Cooperative department, as long as it meets the financial criteria. Residents unsure about their GST obligations can visit their local Commercial Tax Office, pay ₹500, and obtain an official letter clarifying their status. However, with the tax now unavoidable for qualifying societies, experts are urging them to streamline their accounts and prepare for ongoing compliance — or risk penalties and bureaucratic red tape.
