CAM Charges Explained for Commercial Property in India

What common area maintenance (CAM) covers, how it is calculated, how GST applies, and how a year-end CAM reconciliation settles the difference.

Common area maintenance (CAM) charges are what tenants of an office building, mall or business park pay for the upkeep of the shared parts of the property. Next to rent, CAM is often the largest monthly cost of occupying commercial space — and the most frequently disputed.

What CAM charges usually cover

The lease (or a separate maintenance agreement) defines what is included. Items to look out for: capital replacements (such as a new lift) being passed through as CAM, and whether the CAM on vacant units is borne by the landlord.

How CAM is calculated

In Indian commercial property CAM is usually quoted per sq ft per month on the chargeable (super built-up) area. A tenant occupying 3,000 sq ft at ₹20 per sq ft pays:

3,000 sq ft × ₹20 = ₹60,000 a month, plus GST at 18% (₹10,800) = ₹70,800.

There are two common models:

GST on CAM charges

Maintenance services are taxable, and CAM billed by the landlord or facility manager generally attracts GST at 18%. Whether it appears as CGST + SGST or IGST depends on whether the supplier and the tenant are registered in the same state. CAM appears as its own line on the invoice — in LeaseHub360 with SAC code 997221.

Year-end CAM reconciliation, with an example

Under variable CAM, the provisional amounts billed during the year are compared with what was actually spent:

  1. Total the actual CAM cost. A building spent ₹96,00,000 on common-area maintenance in the year.
  2. Divide by chargeable area. Leased chargeable area is 40,000 sq ft, so actual CAM was ₹96,00,000 ÷ 40,000 ÷ 12 = ₹20 per sq ft per month.
  3. Compare with what was billed. Tenants were billed a provisional ₹18 per sq ft — ₹2 less than actual.
  4. Settle the difference. A 3,000 sq ft tenant underpaid ₹2 × 3,000 × 12 = ₹72,000 and receives a debit note for it, plus GST. Had actual costs been lower, tenants would receive a credit note instead.
Tenants usually have the right to see the cost statement behind the reconciliation. Sharing it up front avoids most CAM disputes.

Keeping CAM under control

See how LeaseHub360 bills and reconciles CAM charges, or calculate GST on rent and charges.

Frequently asked questions

Who pays CAM on vacant units?

Usually the landlord, since vacant area has no tenant to bill. The lease should say so explicitly; otherwise tenants may find vacant-area costs spread over the occupied area.

Can CAM charges increase every year?

Yes. Fixed CAM often escalates annually (5% is common), and variable CAM changes with actual costs. The lease should state how and when.

Is CAM the same as maintenance charges?

In practice, yes — "CAM", "maintenance charges" and "common area charges" are used interchangeably in Indian leases, though some leases bill utilities or a management fee separately.

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