GURUGRAM: Resident welfare associations (RWAs) have urged Haryana CM Nayab Singh Saini that essential services like security, water supply, and sanitation should not be subjected to luxury taxes. They are calling for a rationalization of the GST applied on monthly maintenance fees.
In their appeal, they have asked Saini, who also oversees finance, to reduce the GST rate from 18% to 5% and to raise the exemption limit from Rs 7,500 to Rs 10,000 per flat per month.
This request arises in light of PM Modi’s announcement on Independence Day, which stated that the GST framework would be revamped into a two-tier structure: 5% for common goods and 18% for others. RWAs contend that the fees for maintaining essential services fall under the first category and should not be treated as luxury expenditures.
“RWAs do not operate for profit. The fees collected are used for basic necessities like water, sanitation, security, and lighting—vital for urban living. It is unjust to classify these essential services alongside luxury items, especially for senior citizens and working families. The government should align RWA services with the 5% GST rate to support middle-class families,” stated Ina Malhotra, president of National Medica Centre Cooperative House Building Society Ltd. She has also addressed this issue to Finance Minister Nirmala Sitharaman, chairperson of the GST Council. “We hope CM Saini will bring these concerns to the GST Council’s attention,” added Malhotra.
Since the introduction of GST in July 2017, the tax on RWAs has been a contentious topic. Contributions exceeding Rs 5,000 per flat per month (later revised to Rs 7,500) incur an 18% GST. Residents argue that this unfairly equates the maintenance of residential areas with luxury services such as gyms and clubs.
Praveen Malik, president of the United Association of New Gurugram, added, “This tax structure is fundamentally flawed. RWAs are end consumers and merely act as intermediaries between residents and service providers. Despite our residents not being subject to GST, we, as an RWA, are obliged to pay taxes to service providers. Imposing an 18% GST on essential community services shows a lack of understanding of RWA operations. Adjusting GST rates would directly benefit the end-users.”
