Housing societies collect a range of charges beyond monthly maintenance: transfer fees, NOCs, parking charges, clubhouse or amenity charges, premiums for additional area or usage rights, and contributions to sinking or repair funds. A “premium” charge is typically consideration for a specific privilege, permission or additional benefit granted by the society to a member or a third party. The GST question is whether the premium is a taxable supply and how it interacts with the ₹7,500 maintenance exemption and the ₹20 lakh registration threshold.
The Premium Is Not Maintenance
The ₹7,500 per-member monthly exemption under Entry 77 of Notification No. 12/2017 applies to contributions for sourcing goods or services from a third person for common use in a housing society or residential complex. A premium charge is not a contribution for common-use sourcing; it is consideration for a specific privilege or permission granted by the society. The premium therefore falls outside the maintenance exemption and must be analysed on its own character.
Where the society is registered under GST, a premium charge for a taxable supply attracts GST at the applicable rate. The invoice should describe the premium as a premium or permission charge, not as maintenance, so that the character of the supply is clear on the document.
Registration and Aggregate Turnover
A society is required to register under GST where aggregate turnover exceeds ₹20 lakh (₹10 lakh in the special category states specified for services). Aggregate turnover includes taxable supplies, exempt supplies and zero-rated supplies. Maintenance charges, premiums, transfer fees, parking charges, amenity charges, rental income and interest on delayed payments are aggregated.
A society with maintenance charges below ₹7,500 per member per month may still cross the ₹20 lakh threshold because of premium income and other charges. The premium is therefore relevant not only to its own taxability but also to the society’s registration obligation. A society that assumes it is below the threshold because its maintenance charge is below ₹7,500 may be wrong if its other income pushes aggregate turnover above ₹20 lakh.
The ₹7,500 Interaction and the Full-Amount Question
Where maintenance charges exceed ₹7,500 per member per month and the society is registered, the CBIC’s Circular No. 109/28/2019-GST states that GST applies to the entire maintenance amount, not merely to the excess over ₹7,500. This position is contested, and the society should obtain advice on its facts. The premium is separate from the maintenance charge; it is not brought within the ₹7,500 computation, and it does not become exempt because the maintenance charge is within or above the limit.
The practical point is that the premium and the maintenance must be invoiced separately and described accurately. A society that combines a premium with maintenance on the same invoice risks obscuring the nature of the supply and misapplying the exemption.
What the Society Should Control
The society’s GST position on premiums depends on three variables: whether the premium is correctly characterised as a separate taxable supply; whether the society’s aggregate turnover crosses the registration threshold when premium income is included; and whether the invoice distinguishes the premium from maintenance. The society that controls these variables avoids under-reporting premium income and misapplying the maintenance exemption.
Call to Action: We advise housing societies and RWAs on premium charges, maintenance exemptions, registration thresholds and invoice discipline. For a society-specific GST review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.