Updated 22 October 2026. We re-read the two news reports of the order and the relevant sections of the RERA Act, 2016 in their official text. The order itself was not available to us, and no report names the case number or project. This guide goes further than the coverage so far: it quotes the statute, separates what a buyer must still pay from what the builder carries, and gives a line-by-line way to read a possession demand letter.

What K-RERA decided

  • GST on water: the authority said water supplied by a public authority for domestic use is exempt from GST, though commercial supply may be taxed. It directed the builder to remove the 18% GST from the BWSSB domestic water bill (PropNewsTime, 14 October 2026).
  • Extra charges: the buyer disputed ₹1,18,487 charged on top of the water-related dues set out in the sale agreement. The builder was told to justify the additional GST collection and refund wherever applicable (PropNewsTime).
  • Builder's argument: the flat was sold at a fixed, all-inclusive price, and BWSSB charges were statutory service costs outside the base price (PropNewsTime).
  • Outgoings: the authority reiterated that under sections 11(3) and 11(4) of RERA, promoters are responsible for municipal taxes, water and electricity charges, maintenance and other dues to authorities until possession is handed over (PropNewsTime).
  • Delay interest: interest charged for more than 600 days from 11 February 2024 was rejected, because the builder produced no emails, notices or messages showing the buyer delayed payment or ignored demands (PropNewsTime).

What the RERA Act actually says

Section 11(4)(g) requires the promoter to pay all outgoings until it transfers physical possession to the allottee or the association, where it has collected money from allottees for those outgoings. The section lists land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, and mortgage loans and interest related to the project (RERA Act 2016, official text).

Its proviso adds that if the promoter fails to pay outgoings it collected before transfer, it remains liable even after transfer, including penal charges and the cost of any legal proceedings (RERA Act 2016).

The buyer has duties too. Section 19(6) makes the allottee pay as the agreement for sale specifies, including their share of registration charges, municipal taxes, water and electricity charges, maintenance charges and ground rent. Section 19(7) makes the allottee liable for interest at the prescribed rate on delayed payments (RERA Act 2016).

So this ruling is not a general ban on every charge at possession. It says charges must follow the agreement and the law, GST cannot be added where the supply is exempt, and interest needs evidence.

Which possession-stage charges are usually legitimate, and which to question

This is our checklist, built from the statute and the ruling. Your agreement for sale decides the details.

  • Usually legitimate if in the agreement: your share of stamp duty and registration, advance maintenance, corpus fund, BESCOM and BWSSB connection deposits, and khata transfer costs.
  • Question: GST on a pass-through domestic water bill from BWSSB. K-RERA treated it as exempt (PropNewsTime).
  • Question: municipal tax, water or power bills for the period before you were offered possession. Section 11(4)(g) puts outgoings on the promoter until possession.
  • Question: any amount not named in the agreement for sale or cost sheet, such as the extra ₹1,18,487 in this case.
  • Question: delay interest without dated demand letters and reminders. K-RERA rejected interest that had no paper trail.

What to do if your demand letter looks wrong

  • Ask the builder, in writing, for an itemised statement that ties every line to a clause of the agreement for sale.
  • Ask for copies of the BWSSB and BESCOM bills behind any recovery, with the billing period shown.
  • For any interest charge, ask for the dated demand letters and reminders it is based on.
  • Pay undisputed amounts on time, and record any disputed amount as paid under protest, so the dispute does not delay your possession.
  • If talks fail, file a complaint with K-RERA. Our step-by-step guide: How to File a Complaint in Karnataka RERA: 2026 Guide.

How the industry read the ruling

Urban Acres reported on 22 October 2026 that the ruling was welcomed by home buyers' associations. Farook Mahmood, president emeritus of the Bangalore Realtors Association of India, said it defined pre-handover statutory costs as the builder's liability, and cautioned that small and mid-sized developers may face short-term cash-flow pressure and some may try to recover costs through higher base prices (Urban Acres). Buyer representatives advised purchasers to examine sale agreements, seek itemised statements and keep payment records (Urban Acres).

Practical lesson: ask for an all-in cost sheet before you book, so that any statutory cost is visible in the price rather than in a demand letter later. Our worked example: Flat Cost Sheet in Bangalore: 12 Charges, One Worked Example.

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