CAM Charges: Meaning, What Is Included and How Malls Calculate Them

This guide is for mall operations, finance and leasing teams who bill common area maintenance, and the tenants who pay it. CAM sits next to rent on every mall invoice and is often the line tenants question most. It covers inclusions, how Indian malls calculate CAM, GST and TDS, and how to keep disputes out of renewals.

What Are CAM Charges?

CAM charges pay for the areas every tenant shares: atriums, corridors, washrooms, lifts, escalators, parking and building services. Other names: CAM expenses, CAM fees, maintenance charges or service charges. Whatever the label, the lease defines what CAM covers, how it is calculated and how it can rise, so the lease, not market custom, decides disputes.

What Is Included in CAM Charges

India has no statutory list of CAM items. Typical mall lease positions:

The tenant's rule of thumb: CAM pays for running the common areas, not improving the asset, marketing it or covering vacancy. Write each position into the lease.

How CAM Charges Are Calculated in Indian Malls

No model is mandated by law; the lease picks one, often a mix.

The area base: chargeable or super area

Most Indian mall leases bill CAM per square foot of chargeable area, often the super built-up area (carpet area plus a loading for common areas). Loadings differ between malls, so two stores with the same carpet area can pay very different CAM. Compare rates on the same area basis.

Fixed CAM rates with escalation

The landlord quotes a fixed rate per square foot per month that rises by an agreed percentage at set intervals. The tenant gets certainty and the landlord carries the cost risk; without reconciliation, queries concern service levels.

Actuals with year-end reconciliation

The landlord bills a provisional rate from the annual budget, then reconciles against audited actual costs after year end with a credit or supplementary bill. Many leases add a management fee as a percentage of actuals. Fairer in principle, it generates more disputes because every cost line can be questioned.

Items billed outside CAM

Store electricity is normally metered separately; tenant-area HVAC, marketing, signage and parking are commonly separate too. Check that nothing is charged twice.

Worked Example: Calculating CAM for a Mall Store

All figures are illustrative, not market rates.

1. Budget the common-area costs. The mall's annual CAM budget is ₹48 crore and its total chargeable area is 5,00,000 sq ft.
2. Derive the provisional rate. ₹48,00,00,000 / 5,00,000 sq ft = ₹960 per sq ft per year, or ₹80 per sq ft per month.
3. Bill the tenant monthly. A store with 2,000 sq ft chargeable area pays 2,000 x ₹80 = ₹1,60,000 a month, plus GST.
4. Reconcile at year end. Audited actual costs come to ₹50.4 crore, or ₹1,008 per sq ft per year. The tenant's true-up is 2,000 x (₹1,008 - ₹960) = ₹96,000 for the year, plus GST.
5. Apply the lease terms. If the lease allows a management fee (say 10% of actuals), it is added before the true-up. If the landlord bears the vacant-unit share, actual costs are divided by total chargeable area, not by occupied area.

Step 5 is where most of the money in a CAM dispute sits. If 10% of the mall were vacant and the landlord spread costs over occupied area only, every tenant's CAM would rise by about 11% (1 / 0.9).

GST and TDS on CAM Charges

Tax treatment changes with notifications and rulings; confirm it with your tax adviser before finalising leases or invoices.

GST on CAM charges

CAM billed to commercial tenants is a taxable maintenance supply, generally invoiced at 18% GST, the rate for renting and maintenance of commercial property. GST rates were restructured from 22 September 2025, so check the current rate entry.

On electricity, CBIC Circular No. 206/18/2023-GST (31 October 2023) says electricity bundled with renting or maintenance of premises is a composite supply taxed at the rate of the principal supply, even if billed separately. Where the mall charges electricity at actuals, at the same amount the State Electricity Board or DISCOM charges, it is deemed to act as a pure agent and that amount is outside the value of its supply.

TDS on CAM charges

In Commissioner of Income Tax (TDS)-1, Delhi v. Liberty Retail Revolutions Ltd. (ITA 170/2025, decided 22 May 2025), the Delhi High Court dismissed the Revenue's appeal and upheld the Tribunal's view that CAM charges paid by a tenant of Ambience Mall, Vasant Kunj, were not "rent" under Section 194-I of the Income Tax Act, 1961. CAM was payment for "work" under Section 194C, so tax was deductible at the contractor rate (2% in that case) rather than 10%.

"CAM charges are essentially maintenance charges paid by a unit for proper maintenance of the common area... The said charges cannot, by any stretch, be construed as payment of rent for occupying the premises in question." Delhi High Court, 22 May 2025

Under CBDT Circular No. 23/2017 (19 July 2017), where GST is shown separately on the invoice, TDS is deducted on the amount excluding GST. From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act and consolidated TDS provisions, so section references have changed; confirm the current classification with your adviser.

CAM vs Rent vs Service Charge vs Society Maintenance

• Rent (or licence fee): the right to occupy the unit; fixed per sq ft, or minimum guarantee plus revenue share. TDS as rent.
• CAM charges: running the common areas; per sq ft of chargeable area, fixed or actuals. The Delhi High Court treats it as "work", not rent, for TDS.
• Service charge: often the same as CAM, common in offices and leases drafted on UK lines, usually actuals with reconciliation. Read the definition, not the label.
• Housing society maintenance: upkeep of a residential society, per flat or per sq ft. GST is exempt up to ₹7,500 per member per month, subject to conditions.

How Tenants Can Audit CAM Charges

Run this yearly, before accepting the reconciliation bill.

1. Read the CAM clause: inclusions, exclusions, area basis, escalation, management fee and vacant units.
2. Check the area. Confirm your chargeable area and the mall's total (the denominator), and whether it changed.
3. Ask for the cost schedule. Budget versus actual by cost head, with the auditor's certificate where the lease provides one.
4. Look for capital items. Routine servicing of the kind in a preventive maintenance checklist is a running cost, but replacements, renovations and upgrades often hide inside "repairs and maintenance".
5. Check for double billing of HVAC, electricity, marketing and signage inside CAM and as separate lines.
6. Compare service to spend. If housekeeping cost rose 15% but washrooms got worse, raise it with dated complaints, photos and your monthly service ratings, measured against the mall's housekeeping checklist.
7. Raise queries in writing within the lease's dispute window, and pay the undisputed portion so the dispute stays about the numbers.

How Mall Operators Reduce CAM Disputes

Most CAM disputes start when tenants feel the service does not match the bill. Operators who avoid them do four things.

• Itemised statements: the CAM budget at year start and a cost-head reconciliation, in the same format every year.
• Service-level evidence: time-stamped records of housekeeping, security and engineering rounds, with photos for the items tenants care about. Start with a written mall operations checklist for each round.
• Monthly tenant feedback: ratings for air conditioning, cleanliness, lifts, security and parking, acted on before reconciliation season. See our guide to mall tenant satisfaction surveys.
• A named CAM contact in finance or tenant relations who answers queries within a fixed time, so questions do not become withheld payments. The mall manager role and responsibilities guide covers where this sits.

Showing Tenants the Service Behind the CAM Bill

Two LazyMonkey products supply the service record behind the bill, not the billing itself.

• Tenant Survey sends every store a short monthly questionnaire by email, SMS or WhatsApp, with reminders, and tracks scores by month and service area.
• Checklists records housekeeping, security and engineering rounds started by a QR scan on site, with photos, meter readings and escalation of failed items, and exportable MIS reports.

Conclusion

CAM charges are simple arithmetic wrapped in lease definitions. Settle inclusions, capital items, management fees and vacancy in the lease, bill GST and deduct TDS on the current basis, and give tenants regular evidence of the service CAM pays for.

Frequently Asked Questions