Finance minister Arun Jaitley confirms that GST will come into action July 1 onwards across the country. Under GST purview flats owners have to pay around 2.5% excess tax on the maintenance charges on the residential buildings. Flat owners who pay more above 5000 as maintenance barring the property tax, stamp duty, and electricity and water charges are considered to be charged this additional burden under this fresh tax regime.
New maintenance charge taxable under GST is 18%. The earlier one was 15.55% which will be ousted by the revised one. Under the outgoing regime the division was 15% service tax, 0.5% Swachh Bharat tax, and 0.05% nonagricultural tax, totaling 15.55%. The current rate is also applicable on housing estates that have a yearly corpus or balance of more than 20 lacs (excluding excluding property tax, stamp duty, and electricity and water charges, and also maintenance charges collected from flat owners).
In case any raw material such as- cement, steel or paint brought for renovation or maintenance purpose of apartments and society premises the tax paid on such expenses will be deducted from the total tax amount paid under GST. To avail of this adjustment, fist the GST tax needs to be paid and then a credit claimed. Under GST there will be a flat 18% tax on maintenance. Housing societies think that GST’s main effect will be sensed on the society corpuses. Under the previous tax regime one annual return needed to be filed, whereas at least 37 needed to be filed under GST regime. This new burden would rather squeeze society corpus. Housing societies that are dealing with delay in conveyance deeds already have paid additional stamp duties.
“The Real Estate (Regulation and Development) Act, 2016 (RERA) has already prescribed that after deliverance within 5 yrs of time period if a housing society needs any constructional repair, builder is liable to fix it within 30 days from the time when the notice served by the society authority and for this reconstruction he can’t charge the inhabitants,”-said Mr. Mahesh Somani RERA expert of West Bengal. Speaking on the GST implementation Somani also stated, “For selling property faster under this flat market in Kolkata, developers are seen free maintenance charge or parking charges for potential consumers who want to buy flats in Kolkata. But yes, maintenance charge will surely be increased for the societies at the same time under GST regime.”
-Somani Realtors News Network