Lift maintenance is one of the largest recurring expenses in a housing society. The GST treatment depends on how the charge is structured and who is the recipient of the supply. Where the society pays a lift maintenance contractor for an annual maintenance contract, the contractor charges GST on the service. Where the society recovers the lift maintenance cost from members as part of the monthly maintenance charge, the recovery is analysed under the society’s maintenance framework. The technical issue is the boundary between the contractor’s taxable supply to the society and the society’s recovery from members.
The Contractor’s Supply to the Society
A lift maintenance contractor providing an annual maintenance contract, repair services or modernisation services to a society is supplying a taxable service. The contractor charges GST at the applicable rate where the contractor is registered. The society, if registered, can ordinarily claim input tax credit on the contractor’s invoice where the invoice is in the society’s name and the service is used for the society’s business of maintaining common areas.
The AMC invoice should describe the service as lift maintenance or repair, with the SAC and the GSTIN of the society. A generic “maintenance” description across lift, housekeeping and security creates ambiguity if the credit is reviewed.
The Society’s Recovery From Members
Where the society recovers lift maintenance cost from members as part of the monthly maintenance charge, the recovery is part of the society’s maintenance contribution. 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. Lift maintenance is a common-use service, and the recovery can fall within the maintenance framework where it is structured as part of the maintenance contribution.
Where the lift maintenance is separately charged as a distinct lift charge, the characterisation depends on whether it is a contribution for common-use sourcing or a separate service. The safer approach is to align the invoice description with the substance: if the charge is part of the monthly maintenance contribution, it should be described as maintenance; if it is a separate charge for a specific service, it should be described accordingly.
The ₹7,500 and ₹20 Lakh Thresholds
The society’s aggregate turnover includes taxable supplies, exempt supplies and zero-rated supplies. Maintenance contributions, lift-specific charges, interest on delayed payments and other income are aggregated. A society with maintenance charges below ₹7,500 per member per month may still cross the ₹20 lakh threshold because of other income.
Where maintenance charges exceed ₹7,500 per member per month and the society is registered, the CBIC Circular No. 109/28/2019-GST states that GST applies to the entire maintenance amount, not merely the excess. This position is contested, and the society should obtain advice on its facts. The lift maintenance recovery, where it is part of the maintenance contribution, is analysed within this framework.
What the Society Should Control
The society’s GST position on lift maintenance depends on three variables: whether the contractor’s invoice is in the society’s name and supports credit; whether the recovery from members is structured as part of the maintenance contribution or as a separate charge; and whether the society’s aggregate turnover crosses the registration threshold. The society that controls these variables avoids both losing credit on the contractor’s invoice and mischaracterising the recovery from members.
Call to Action: We advise housing societies and RWAs on lift maintenance contracts, AMC ITC, maintenance-charge structuring and registration thresholds. 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.