CHENNAI: The Federation of OMR Residents Associations (FOMRRA), representing over 250 gated communities along the city’s IT Corridor, OMR, has partnered with community governance platform ADDA (3Five8 Technologies) to submit a formal joint representation to the National Payments Corporation of India (NPCI) and the Ministry of Finance.
Supported by a national coalition of nearly 200,000 Resident Welfare Associations (RWAs), including MahaSewa, the Bangalore Apartments Federation (BAF), and Chandivali Citizens Welfare Association (CCWA), the petition urges the government to notify apartment maintenance collections as an essential utility category eligible for a flat Rs 5 Merchant Discount Rate (MDR) on UPI transactions above Rs 2,000.
The coalition strongly opposes the proposed 0.4 per cent commercial MDR levy set to take effect on 15 October. The petition highlights that housing communities operate strictly on a non-profit, cost-recovery basis, collecting funds solely to pay for shared essential services such as security, water, common-area electricity, and lift maintenance. While direct payments to power and water utilities already qualify for the flat Rs 5 MDR rate, aggregating these payments through an RWA penalises citizens with a 0.4% fee.
On a standard maintenance bill of Rs 10,000, this extracts Rs 40 per flat, eight times the utility rate, whereas on quarterly bills of Rs 25,000, the fee jumps to Rs 100 per transaction. This charge will ultimately be passed back to residents as higher maintenance costs, violating the core principle that consumers should not bear UPI charges.
“Applying a commercial 0.4% MDR on housing society maintenance is fundamentally irrational. RWAs do not retain trade margins or earn profits, warning that imposing commercial charges will force honorary, voluntary resident committees back to physical cheques, cash collections, and manual bank transfers,” stated Harsha Koda, co-founder of FOMRRA. “This threatens years of hard-won digital adoption, increases administrative chaos and disrupts statutory audits.”
The coalition also criticised broader regulatory misunderstandings, such as the 18% GST on maintenance fees above Rs 7,500, urging the government to stop treating non-profit communities as commercial businesses. Key demands include a dedicated Merchant Category Code (MCC) for registered RWAs and an immediate executive notification of the flat Rs 5 UPI rate before October 15.