BENGALURU: The Goods and Services Tax (GST) Council is set to review certain GST slabs starting Wednesday. In response, the Bangalore Apartments’ Federation (BAF) has launched a petition aiming to eliminate the 18% GST on apartment maintenance fees. According to federation members, the notification issued in 2019 has placed an unfair financial strain on Residents’ Welfare Associations (RWAs) and apartment owners alike.
The petition, hosted on change.org by BAF, claims, “The notification mandates that GST is applicable on the entire monthly maintenance fees collected by RWAs if charges exceed Rs 7,500 per month per member or unit.” It emphasizes how rising living costs disproportionately impact middle-class families, compelling them to rethink their budgets and sacrifice essential needs.
Satish Mallya, President of BAF, explained that Apartment Owners’ Associations (AOAs) and RWAs are voluntary, non-profit entities formed by residents to manage community affairs. “Elected by homeowners, they oversee vital services such as cleanliness, security, and infrastructure maintenance. The 18% GST on maintenance fees significantly raises costs, complicating residents’ ability to fulfill these responsibilities amid existing financial pressures,” Mallya stated.
The petition further argues that while GST was introduced to simplify indirect taxes and make essential goods more affordable, its current application places an undue burden on those relying on RWAs to sustain their homes and communities. Notably, individual residents do not benefit from GST credits, yet they are still obligated to pay an 18% tax.
Additionally, Mallya criticized the Rs 7,500 threshold as arbitrary, suggesting it fails to account for regional living costs. “We urge the government to revisit this regulation, either raising the exemption limit based on inflation or lowering the GST rate significantly, or ideally, abolishing GST for RWAs entirely,” he added.
‘Centre Withholding Key Data on GST Impact’
Revenue Minister Krishna Byregowda has expressed frustration over the central government’s failure to disclose the anticipated effects of GST simplification on state revenues. The minister pointed out that while various organizations project a potential loss ranging from Rs 85,000 crore to Rs 2.5 lakh crore, the Centre has remained silent. This lack of transparency raises significant concerns for Karnataka and other states, which heavily rely on GST for financial stability, unlike the central government which garners revenue from various other sources that are not shared with states. The minister warned that should states lose 20% of their revenue, their economic independence could be jeopardized.
