Gurgaon RWAs seek reduction in GST on maintenance bills from 18% to 5%

Time of India

a day ago

Gurgaon: Essential security, water supply and sanitation should not be taxed like luxury services, said resident welfare associations, which, in an appeal to Haryana CM Nayab Singh Saini, have sought rationalisation of GST on monthly maintenance bills.
They have also urged Saini, who has a finance portfolio as well, to push for cut in the levy from 18% to 5% and revise the exemption threshold from Rs 7,500 to Rs 10,000 per flat per month.
The demand comes against the backdrop of PM Modi's Independence Day announcement that the GST regime would be simplified into a two-rate structure — 5% for items of common use and 18% for others. RWAs argued that the maintenance fees collected for basic services fall into the former category and must not be equated with luxury spending.
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"RWAs are not profit-making entities. The maintenance, which is collected, goes into basic services like water supply, sanitation, security, and lighting – all critical for urban living. Treating them at par with luxury services is unfair and burdens residents, particularly senior citizens and salaried families. The govt should align RWA services with the 5% slab and provide relief to middle-class families," said Ina Malhotra, president of National Medica Centre Cooperative House Building Society Ltd, who has also submitted the representation to the union finance minister Nirmala Sitharaman, who is chairperson of the GST Council.
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"We hope CM Saini will flag the issues in the GST Council's deliberations and ensure that society maintenance is recognised as an essential service," added Malhotra.
Since its rollout in July 2017, GST on RWAs has remained a contentious issue. Contributions above Rs 5,000 per flat per month (later revised to Rs 7,500) attract 18% GST. The rate, residents have consistently opposed, saying it unfairly equates the upkeep of residential colonies with luxury services like gyms and clubs.
Meanwhile, other associations are also preparing similar representations. Praveen Malik, president of the United Association of New Gurugram, said, "This tax structure is flawed at the very root. RWAs are end consumers; they act as facilitators between residents and service providers. Although the residents in our society do not fall into the GST ambit, as an RWA, we have to pay the taxes to service providers. Applying GST at 18% on essential community upkeep reflects a lack of understanding of how RWAs function.
Revising GST will directly benefit end-users."
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