Electricity & Water Charges Recovered by Housing Society Taxable Under GST

In re Sandeep Vihar Owners Association (GST AAR Karnataka)

The Authority for Advance Ruling (AAR), Karnataka, examined an application filed by an apartment owners’ association registered under the Karnataka Societies Registration Act, 1960. The association manages and maintains a residential complex developed by the Army Welfare Housing Organisation for Indian Army personnel, including serving soldiers, veterans, war widows, and their families. The association is responsible for security, housekeeping, waste management, supply of potable water, and maintenance of common facilities. It recovers expenses such as water and electricity charges from members on an actual-cost basis and collects monthly maintenance contributions along with a corpus fund intended for future contingencies and major repairs. The complex also contains a community centre that provides recreational facilities for residents, for which a fixed monthly charge is collected.

The applicant sought an advance ruling on four issues: whether recovery of water charges from members attracts GST; whether recovery of electricity charges for common areas is taxable; whether corpus fund contributions collected for future capital expenditure constitute a supply liable to GST and, if so, the applicable time of supply; and whether charges collected for the upkeep of the community centre qualify as monthly maintenance charges eligible for the exemption threshold under GST notifications.