Eb charges

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2013 if we are providing electricity to our tenants through our dg set or through out direct line of electricity ,can we charge service tax on invoice/bill , basically we running this service from our building as a a commercial center on lease to various tenents should we charge or not in tamil nadu chennai

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2013 pl give details to us

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2024 In Tamil Nadu, including Chennai, the applicability of service tax on electricity charges provided by landlords to their tenants has been a topic of discussion and clarification by the authorities. Here are some points to consider based on the general guidelines:

1. **Electricity Supply by Landlords:** If you, as a landlord, are supplying electricity to your tenants through a DG set or directly from your building's electricity supply, this activity can potentially be considered as a service provided by you to your tenants.

2. **Service Tax Applicability:** Historically, there has been ambiguity regarding the applicability of service tax on such electricity charges. However, as per Service Tax Rules, the provision of electricity to tenants by landlords does not explicitly fall under any taxable service category listed under Service Tax laws.

3. **Legal Interpretation:** The legal interpretation and applicability may vary based on specific circumstances and interpretations by tax authorities. Generally, if the service is not explicitly covered under taxable services, service tax cannot be levied on such charges.

4. **GST Regime:** Under the Goods and Services Tax (GST) regime, which replaced Service Tax, electricity supply by landlords to tenants is specifically exempt from GST. Therefore, no GST should be charged on electricity provided to tenants.

5. **Practical Approach:** It is advisable to consult with a qualified tax advisor or a local tax consultant in Chennai to get a precise understanding of the current regulations and practices. They can provide guidance based on local interpretations and any recent updates from tax authorities.

In summary, under Service Tax rules and especially under GST, electricity supply by landlords to tenants is generally exempt from taxation. However, specific legal advice tailored to your situation in Chennai would be crucial for compliance and to ensure that you are adhering to all applicable tax laws correctly.

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