GST on Housing complex maintenance

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A resident is questioning the legality of being charged 18% GST on a 15-year advance maintenance payment for their apartment in a retirement community, as their monthly maintenance is below the £7500 threshold. While GST is generally not applicable to lump-sum maintenance deposits or separately collected water charges once a society is formed, it appears the exemption might not apply during the construction phase before the society is established. Professional advice is recommended for this specific situation.

Sunil Verma

Sunil Verma (Querist)
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04 June 2023 I bought an apartment on 999 year lease in retirement community. Building is under construction and advance maintenance for 15years is given. The promoter has taken 18% GST on maintenance amount even though monthly maintenance is much less than 7500.
Is it legal and correct to apply 18% GST in this case ?
Thanks
Sunil Verma

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 June 2023 Not legal.
Lump-sum deposit towards maintenance and Water Charges collected separately from housing society members are not subject to GST: AAR

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)
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06 June 2023 I would suggest you personally visit any Professional Near you because since the Society is not formed because its under construction Project so Exemption of 7500/- or AAR wont apply because as mentioned by Expert that "collected separately from Housing Society Member's"

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