Hyderabad: Insurance premiums will cost more with the rollout of GST from July 1. However, tax experts have suggested ways to slip out of the tax net.
Tax expert P. Narasimha Rao says, “The 18 per cent GST is not applicable on municipal tax, property tax, water bill etc. But funds spent on repairs attract 18 per cent tax.
“However, cooperative societies can avoid the tax net if they rework their maintenance bill heads to split taxes from the overall maintenance account head. Multiple account heads will have to be created to show taxes paid by the society. Only the balance maintenance amount and repair fund should be calculated for GST.”
He said that though housing societies collecting Rs 5,000 and above as maintenance charges are negligible, housing societies that contribute over Rs 20 lakh as annual maintenance will attract GST. Such societies could be split into smaller ones in the same complex, though this process would be cumbersome, Mr Narasimha Rao said.
Said Rao, “In this case, large societies can be split into separate smaller societies, which will help in restraining the annual maintenance billing to less than 20 lakhs, but this is a cumbersome process.”
