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GST Applicability on recovery of electricity charges

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Varun Monga

finance Manager

22 Points Posted on 12 December 2022

Dear Members ,

I have three queries relating to the same transaction.

Background : We are a logistics & warehousing company providing the services for the same .

There are multiple customers/clients in the warehouses .

The electricity bill for the month is pro-rated and recovered from each customer based on the usage .

i)The HSN Code 998311 .Is this correct.If not ,is there an issue if GST is not charged

ii)Is the recovery of electricity subject to GST

iii)A few customers are charged @ 1/sq ft consolidated for electricity ,generator back up diesel etc .Is this subject to GST.

Would appreciate if response to the above queries can be given.

Thanks & regards ,

Varun Monga

Replies (2)

Quick Summary

This discussion explores the Goods and Services Tax (GST) implications for logistics and warehousing companies recovering electricity charges from clients. It clarifies whether recovering electricity bills directly from customers constitutes a reimbursement not subject to GST, provided the company isn't an electricity provider. However, if electricity is bundled with other services like generator backup, it's considered a mixed supply and attracts GST, typically at 18%.

sabyasachi mukherjee

Profession

19978 Points Posted on 13 December 2022

Gst once paid cannot be recovered.

CA Bikram Shaw

Service

42 Points Posted on 13 December 2022

GST is not attract in Electricity. There are few scenario.

1. In case you charge only Electricity Bill - Treat it as reimbursement as you only collect from party and paid to Electricity Department, since you are not an electricity provider its just reimbursement. GST not attract.

2. In case you provide bundle of services like electricity, generator, backup diesel etc. then treat it as rent for mixed/ bundle supply and attract GST. Pay 18% GST as rent for above.