Buying a home is expensive! The one-time maintenance deposit will now be subject to 18% GST

New delhi date. Thursday 14 January 2021

If you are thinking of buying a flat, read this news carefully as it will directly affect your pocket. Now you have to pay 18 per cent GST on one-time maintenance deposit to buy a flat. This decision has been given by Gujarat Authority of Advance Ruling.

18% GST on 'One Time Maintenance Deposit'

When you go to buy a house or a flat, there are many types of charges, one of which is 'One Time Maintenance Deposit'. Generally, this one time maintenance deposit does not incur any tax. That is, if you are buying a flat and depositing a one-time maintenance to the builder, it means that the deposit money goes to the builder's account, the builder will charge you 18% GST.

How to pay GST on 'One Time Maintenance Deposit'?

But if you are making one-time maintenance deposit in the society's account and the society only takes care of the maintenance and upkeep of the flats, you will not have to pay GST. If you understand in simple language, which is flat in the building, if you buy a house there, you may have to pay GST on one time maintenance deposit. One time maintenance deposit is 'Non-Refundable'. The purpose of this deposit is to continue the supply of services. However, the Gujarat Authority of Advance Ruling ruled that only 18% GST would have to be paid if the builder would maintain the building.

What was the matter

In fact, the Gujarat-based Capital Commercial Coop Service Society had sought advance ruling from the authority. Against the Gujarat Authority of Advance Ruling, the society said that the maintenance deposit taken from the people is refunded to them. According to the GST Act, if the deposit has been refunded, it did not come under Consideration, so GST should not be levied on it, but the Authority did not accept this argument of the Society.

'No GST on deposit'

Regarding this decision of Gujarat Authority of Advance Ruling, the partner of ELP says that GST law states that GST applies to Consideration i.e. if you are making a purchase, GST will be levied on its origin, but if you make a deposit, GST does not apply to it. According to GST law, refundable or non-refundable, if it is a deposit, should not be subject to GST. This means that if it is paid as a deposit and not a 'Consideration', then GST cannot be levied.

Question on the decision of power?

Now, if one buys a flat, he pays with it many kinds of charges like club charge, parking charge etc., he also gives one time maintenance deposit. The Society keeps this deposit in its corpus. So the question is whether there should be GST on this deposit or not, but the decision of the Authority has come, as it is not refundable, so it will be seen as Consideration, so 18 per cent GST will be levied on it.