COURTKUTCHEHRY SPECIAL REPORT ON GST ON HOUSING SOCIETIES FACILITIES
Noida Housing Societies Face Crores in GST Notices Over Maintenance Charges
UP tax department demands GST on electricity and upkeep fees collected by apartment associations
Legal debate centres on exemption limits and definition of “supply” under GST law
By Our Legal Correspondent
New Delhi: December 21, 2025:
Residents of several high-rise societies in Noida are facing unexpected financial and legal pressure after the Uttar Pradesh tax department issued notices demanding crores of rupees in GST dues on maintenance and electricity charges. Apartment Owners’ Associations (AOAs), which manage common facilities, have long believed these collections were exempt from GST. However, authorities now argue that such charges qualify as taxable “supply of services” under the Goods and Services Tax (GST) regime.
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This dispute has triggered widespread concern among residents, who fear massive liabilities, penalties, and interest charges.
Crux of the Legal Issue
The central question is: Are maintenance and electricity charges collected by housing societies taxable under GST?
- Societies’ Position: Maintenance and electricity are essential services, not commercial activities. Under earlier VAT and GST practice, these were not taxed.
- Tax Department’s Position: Collections by AOAs constitute “supply of services” under Section 7 of the CGST Act, 2017, attracting 18% GST if exemption thresholds are crossed.
Relevant Laws and Circulars
- Section 7, CGST Act, 2017
- Defines “supply” broadly to include services provided for consideration.
- Authorities argue that AOAs provide services (maintenance, electricity distribution, club facilities) for consideration.
- CBIC Circular No. 109/28/2019-GST
- Clarifies that GST applies if:
- Monthly maintenance exceeds ₹7,500 per member, AND
- Annual turnover of the society exceeds ₹20 lakh.
- If either condition is not met, GST registration is not required.
- Clarifies that GST applies if:
- Exemption Thresholds
- Societies below the ₹20 lakh turnover or ₹7,500 per member monthly charge are exempt.
- Larger societies in Noida often cross both thresholds, triggering liability.
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Notices Issued in Noida
- Over two dozen AOAs have received notices demanding GST on maintenance and electricity charges.
- Authorities are summoning office bearers and seeking detailed records of collections.
- In some cases, liabilities may exceed ₹1 crore per society, including penalties and interest.
Implications for Residents
- Financial Burden: Residents may face higher monthly bills if GST is added to maintenance.
- Legal Uncertainty: Societies are unsure whether to contest or comply, risking penalties.
- Precedent Setting: The outcome will affect housing societies across India, not just Noida.
Expert Views
- Tax Experts: Stress that societies must comply if thresholds are crossed but argue for clearer exemptions for essential services.
- Resident Welfare Associations (RWAs): Claim the move is unfair, as societies are non-profit entities managing basic utilities.
- Policy Analysts: Note that the issue reflects the tension between broad GST definitions and the need for relief in residential contexts.
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Broader Context
India’s GST regime has often faced disputes over its scope in non-commercial settings. Similar controversies have arisen in:
- Club memberships
- Parking fees
- Gym facilities in societies
The Noida case highlights the need for policy clarity to avoid burdening ordinary residents with commercial-style taxation.
Conclusion
The GST notices to Noida housing societies mark a critical legal and financial battle. At stake is whether maintenance and electricity charges are taxable supplies or exempt essential services. With crores of rupees in potential liabilities, the case could reshape how GST applies to residential communities across India.
The resolution will depend on judicial interpretation of Section 7 of the CGST Act and CBIC’s exemption circulars. Until then, residents remain caught between compliance and contestation.
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