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GST on Electricity Charges

PAWAN SHARMA (Accountant) (23 Points)

17 October 2017

Is GST applicable on electricity charges recovered from the tenants of a commercial market complex or a mall.

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8 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 17 October 2017

The owner in this case is not electricity supplier but a service provider....... hence GST will be applicable....

Gopi Venkatesh (student) (35 Points)
Replied 17 October 2017

as per my view... owner should collect Gst on rent but not on electricity

1 Like

Sampreeth Yathigiri (Article Assistant) (63 Points)
Replied 17 October 2017

If you are able to bifurcate the collection of electricity and Rent seperately no need to pay GST as electricity is exempt from GST, however if the owner is acting as pure agent in GST he can always take a stand that he is only getting the reimbursment of electricity charges.

1 Like

Shivam Chomal (498 Points)
Replied 17 October 2017

Concept of Pure Agent is completely different and it requires fulfillment of much more conditions than just receiving the actual cost of service like , there should be contract between the person acting as agent and supplier ; the person acting as agent neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply etc which is generally not covered in a Rental Agreement. In the instance, leviability will depend upon terms of agreement which can be of 3 types:
1. Rent inclusive of electricity( Say,contract says rent as Rs 15000 inclusive of electricity): In this case, GST will be levied on entire amount of Rs 15000 treating it as single service.

2. Rent say Rs 12000 plus whatever the bill amount comes: In this case GST will be levied on Rs 12000, taking view that the tenant is not the supplier of electricity, GST on bill amount of electricity can't be deducted.

3. Rent say Rs 12000 and Rs 3000 as electricity: In this case too GST will be levied on aggregate amount since taking value of electricity bill as Rs 3000 will come under rental services as if amount comes above that, then tenant will have to pay from his own pocket, if it comes less tenant will keep that.

Basically, the terms and drafting of agreement will play a crucial role. While it is true that GST can't be levied on electricity but in cases where supply of overall service overshadows the electricity supply component, tax will be levied kepping in mind overall service and not just a part of it.

Naveen kumar (CA) (30 Points)
Replied 16 January 2018

Is GST is Chargable on Electricity Paid to BESCOM??

YUSUF (KK) (58 Points)
Replied 17 March 2018

I provide electricty tot teanants through various submeters installed at tenants and charge to tenats on the basis of these meters at the rate for the correposning month charged by the electricty board. Whether i wil have to charge GST on it.

E.G

Feb 2018 total bill of the mall say 1,00,000/-

Units consumed 100,00

Rate derived 10

Charged to tenant No.of Units consumed * above rate derived.