No GST payable on supply of electricity

Last updated: 05 October 2024

Quick Summary

The Maharashtra Authority for Advance Ruling (AAR) has determined that the supply of electrical energy is exempt from Goods and Services Tax (GST). This ruling, based on specific exemption notifications, means companies like AES Engineering Solar are not liable to pay GST on their electricity sales. Consequently, they are also ineligible to claim Input Tax Credit (ITC) on the procurement of their solar power plant.

Court :
AAR, Maharashtra

Brief :
The AAR, Maharashtra in the case of In Re: AES Engineering Solar (P.) Ltd. [GST/ARA/04 of 2023-24/2024-25-57 dated July 31, 2024], ruled that the supply of electrical energy by the AES Engineering was exempt from levy of GST as per Entry No. 104 of Notification No. 2/2017-Central Tax (Rate) dated June 28, 2017, and Notification No. 2/2017-Integrated Tax (Rate) dated June 28, 2017 ("the Goods Rate Exemption Notifications") and is therefore, not liable to pay GST on supply of electricity. Further, the Applicant would not be eligible to claim ITC relating to GST paid on procurement of solar power plant as the outward supply is exempt from levy of GST as per Section 17 and of the Central Goods and Services Tax Act ("the CGST Act") and Rule 42 and 43 of the Central Goods and Services Tax Rules ("the CGST Rules").

Citation :
GST/ARA/04 of 2023-24/2024-25-57 dated July 31, 2024

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