GST on Fuel, Electricity and Water reimbursement

Dear all,

The Facility Management company in my apartment has charged us GST @ 18% on the expenses for Diesel purchase, Water charges (to water tanker vendor) and BESCOM (Electricity bill).Since they pay these amounts on our behalf, this shows up as reimbursement from owners to them in the costing sheet.

Is this a valid and legal charge they're levying? If yes, could you please explain the rationale?

Replies (3)
Quick Summary
This discussion explores whether a Facility Management company can legally charge 18% GST on reimbursements for diesel, water, and electricity expenses. While GST is generally applicable on expenses incurred by the supplier in connection with services provided, there's a debate about whether exempt supplies like electricity and water should attract GST. The consensus leans towards GST being applicable, especially if considered a composite supply where the rate of the principal supply (maintenance) applies. However, it's noted that separate billing for exempt supplies might avoid GST.

Dear
Can plz clarify , what is 'Facility Management Company " ????

In my apartment the Facility Management Company facilitates all services to manage the apartment like housekeeping, security, STP etc. We pay them monthly maintenance for which they charge us service charge + GST. Hope that clarifies.

Yes GST applicable on expenses reimburse by Management Co.

In term of Section 15(2)(c) : All Reimbursement of all expenses that incurred by Supplier in connection with supply of his services & charged to Receptient is Taxable in GST.

Now question arises that Few Expenses ie electricity & water , Diesel Expenses are exempted in GST ,so no GST must be applicable on the same . .... but As per Section 8 it covers under composit supply , the rate for Principal supply is applicable (18% Maintenance)



Note : Yes can generate a separate bill for exempted supply , no GST is applicable therein.

Can also refer the AAR Maharashtra which held
GST applicable on Electricity and Water Charges collected from Tenant along with Rent- (AAR – MAHARASHTRA)

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