GST on Your Water Bill? K-RERA's Kengeri Order on Builder Add-On Charges for Bengaluru Buyers
K-RERA directed a Kengeri developer to remove GST from a domestic BWSSB water bill, justify an extra Rs 1,18,487 and drop unproven delay interest. Who pays outgoings before possession under RERA Section 11(4)(g), and how Bengaluru buyers can check add-on charges.
A Kengeri flat buyer opened a demand from the developer and found three things that did not add up: 18 percent GST on the domestic water bill from the Bangalore Water Supply and Sewerage Board, an extra Rs 1,18,487 over and above the water-related dues in the sale agreement, and delay interest running for more than 600 days from 11 February 2024. The buyer took it to the Karnataka Real Estate Regulatory Authority, and K-RERA largely sided with the buyer.
The short answer. As reported by PropNewsTime, K-RERA directed the developer to remove GST from the domestic water bill, correct the corresponding demand and construction-stage statements, justify the additional GST it had collected and issue a refund wherever applicable. It rejected the delay interest because the builder produced no adequate record that the buyer had delayed payments. The trade-off: buyers can challenge add-on charges, and paperwork decides these disputes; the builder lost the interest claim precisely because it could not show emails, notices or messages, and the same standard applies to a buyer's own claims.
What did K-RERA decide in the Kengeri water bill case?
It ruled largely for the buyer. According to PropNewsTime, the developer argued that the flat was sold at a fixed, all-inclusive price and that BWSSB charges are statutory service expenses outside the flat's base price. The buyer said payments had been made whenever demanded.
K-RERA found, as reported, that "water supplied by a public authority for domestic consumption is exempt from GST", while noting that commercial supply may attract it. It directed the developer to strip the GST from the domestic water bill, correct the demand and construction-stage statements, justify the additional GST collection and refund wherever applicable.
On delay interest, the report says the builder did not produce adequate records, such as emails, notices or messages, showing that the buyer delayed payments or ignored demands, so the interest could not be justified.
Who pays project outgoings before possession under RERA?
The promoter, for outgoings it has collected from buyers. Section 11(4)(g) of the Real Estate (Regulation and Development) Act, 2016 says the promoter shall pay all outgoings until it transfers physical possession of the project to the allottee or the association of allottees, which it has collected from the allottees for the payment of outgoings, including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, mortgage loan and interest, and other liabilities payable to competent authorities related to the project.
The proviso goes further. Where a promoter fails to pay any of the outgoings collected from allottees before transferring the project, it shall continue to be liable, even after the transfer, to pay those outgoings and any penal charges to the authority or person to whom they are payable. Our earlier explainer on the builder's duty on mortgages and outgoings under Section 11 covers this in more detail.
PropNewsTime reports that K-RERA relied on Sections 11(3) and 11(4) in holding that promoters remain responsible for municipal taxes, water and electricity charges, maintenance costs and other government dues until possession is handed over.
| Charge in the demand | Developer's position, as reported | K-RERA's direction, as reported |
|---|---|---|
| 18% GST on domestic BWSSB water bill | Water charges sit outside the fixed price | Remove GST from the domestic water bill |
| Rs 1,18,487 over the agreed water dues | Statutory service expense | Justify additional GST collected; refund where applicable |
| Demand and stage statements | Included the disputed amounts | Correct the statements |
| Delay interest for over 600 days | Buyer delayed payment | Rejected for lack of records |
| Responsibility before possession | All-inclusive price excludes BWSSB charges | Promoter responsible for government dues until handover |
Why did the delay interest fail?
Because the builder could not prove the delay. The report says K-RERA found no adequate records, such as emails, notices or messages, showing that the buyer had delayed payments or ignored demands.
The Act does give promoters a right to interest when buyers pay late. Section 19(7) says the allottee shall be liable to pay interest, at the prescribed rate, for any delay in payment of amounts due under Section 19(6). But a right to interest still has to be supported by evidence that a demand was made and not met on time. In this case, the builder's demand for more than 600 days of interest from 11 February 2024 fell at that hurdle.
The lesson cuts both ways. Buyers should keep every demand letter and payment receipt, because the same evidentiary standard that sank the builder's claim would apply to a buyer trying to prove a delay by the developer.
Is GST charged on water supplied for domestic use?
K-RERA's view in this case, as reported, is that water supplied by a public authority for domestic consumption is exempt from GST, while commercial supply may attract it. PropNewz has not reviewed the GST notifications themselves for this article, so treat this as the regulator's finding in this order rather than a general tax ruling.
For a buyer, the practical step is simple. If your developer passes on a BWSSB water bill with GST added, ask in writing for the basis of the GST, the original BWSSB bill and the calculation. If the explanation does not satisfy you, the Kengeri order is a reported precedent you can cite in a complaint.
Keep the scope in mind. The order dealt with a domestic water bill in one project. Charges for other services, and the tax on them, may be treated differently, so ask for a line-by-line breakdown of any add-on charge rather than assuming the same answer applies.
How can you check a builder's add-on charges before possession?
Compare every demand against your agreement and ask for the underlying bills. The checklist below follows the issues raised in the Kengeri case.
- List the charges your agreement includes in the price and those it allows the developer to collect separately.
- Ask for the original BWSSB, BESCOM or tax bill behind any utility or government charge in a demand.
- Check whether GST has been added to a charge, and ask in writing for the basis.
- Compare the total demanded for each head with the figure in the agreement, and query any excess.
- Ask for the developer's record of any demand it says you paid late, with dates.
- Pay undisputed amounts on time and record your objection to disputed ones in writing.
- Keep receipts, emails and messages in one file, since K-RERA weighed records in deciding interest.
If your water connection is still being set up or transferred, our guide to BWSSB water connection charges in Bengaluru explains what the utility itself charges.
What can you do if you have already paid such charges?
Ask for a refund in writing first, then file a complaint if needed. K-RERA's direction in the Kengeri case included a refund wherever applicable, as reported, which shows the regulator is willing to order money back where collections were not justified.
Section 31(1) of the Act says any aggrieved person may file a complaint with the Authority or the adjudicating officer for any violation or contravention of the Act, rules or regulations against any promoter, allottee or real estate agent. A complaint about outgoings would typically rest on Section 11(4)(g) and the terms of your agreement.
Group complaints can help. If the same charge appears in every buyer's demand, an association of allottees, or a group of buyers acting together, can raise it once with a common set of documents. That also makes it easier to compare how the developer has billed different units.
What does this order mean for the price you agreed?
It means "all-inclusive" is tested against the agreement, not the label. The developer in Kengeri argued the price was fixed and all-inclusive and that BWSSB charges sat outside it. K-RERA nonetheless directed corrections and a refund where applicable, relying on the promoter's responsibility for government dues until possession, as reported.
Before signing an agreement, ask the developer to list in writing every charge that is not part of the base price, including utility deposits, connection fees, maintenance advances and taxes on each. A clear list now is far easier to enforce than a dispute later.
The Act backs this up. Section 13(2) says the agreement for sale shall be in the prescribed form and shall specify the particulars of development of the project, the dates and manner of payments towards the cost of the apartment, the date of possession, and the rates of interest payable by the promoter to the allottee and by the allottee to the promoter in case of default. If a charge is not traceable to your agreement, ask where it comes from before you pay it.
After signing, keep watching the construction-stage statements. The Kengeri order required those statements to be corrected, which shows that errors in them are worth challenging when you spot them, not just at handover.
Frequently asked questions
What did K-RERA order about GST on the Kengeri water bill?
As reported by PropNewsTime, K-RERA directed the developer to remove GST from the domestic water bill, correct the corresponding demand and construction-stage statements, justify the additional GST collection and issue a refund wherever applicable, after finding that water supplied by a public authority for domestic consumption is exempt from GST.
Who pays water and electricity charges before possession?
Section 11(4)(g) of the RERA Act says the promoter shall pay all outgoings it has collected from allottees, including charges for water or electricity, municipal taxes and maintenance, until it transfers physical possession. The proviso keeps the promoter liable for unpaid outgoings even after the transfer.
Why did K-RERA reject the builder's delay interest?
According to PropNewsTime, the builder did not produce adequate records, such as emails, notices or messages, showing that the buyer delayed payments or ignored demands. Without that evidence, K-RERA held that the delay interest of more than 600 days from 11 February 2024 could not be justified.
Can a buyer be charged interest for paying late under RERA?
Yes. Section 19(7) of the RERA Act makes the allottee liable to pay interest at the prescribed rate for any delay in payments due under Section 19(6). The Kengeri case shows that the promoter still needs records of the demand and the delay to support such a claim.
Last updated 2026-10-22. PropNewz Team.
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