As apartments become the cornerstone of urban living in Karnataka, a new financial burden looms large for residents. The 2025-26 Union Budget has introduced a game-changer: housing societies must now impose an 18% GST on monthly maintenance fees if collections exceed Rs 20 lakh annually or if individual maintenance charges are Rs 7,500 or more. With an estimated 50 lakh apartment dwellers in Bengaluru and another 40 lakh across Mysuru, Mangaluru, Hubballi and Belagavi, the policy is sparking widespread concern.
The revised GST regulations mean that even one-time expenses-like painting or lift replacement-pushing a society's annual collection past Rs 20 lakh will trigger the tax. For a society collecting Rs 20 lakh yearly, this translates to Rs 3.6 lakh in GST annually, ballooning to Rs 36 lakh over a decade. Add to that Rs 1-2 lakh in auditing costs for compliance, and the financial strain becomes clear.
Apartment associations are scrambling to adapt. WhatsApp groups are buzzing and emergency meetings are being held to debate GST registration. Once registered, societies face the hassle of filing two monthly returns (on the 11th and 20th) and an annual return. Confusion over the tax rate is rife-many assume it's 5%, but the reality of 18% is a bitter pill.
A tax expert explains, "Societies can claim input tax credit, but compliance is non-negotiable. Even unregistered associations aren't exempt if they meet the GST criteria." For clarity, residents can visit their local Commercial Tax office, pay Rs 500 and get an official confirmation of their GST status.
The stakes are high. Non-compliance risks penalties and red tape, forcing societies to overhaul their financial records. As Karnataka's apartment dwellers brace for this new reality, the question remains: will urban living become even costlier?
CAclubindia
