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GST on recovery of electricity charges, Goods and Services Tax - GST

Issue Id: - 116084
Dated: 2-3-2020
By:- KARAN VERMA
GST on recovery of electricity charges

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Sir

In my factory premises, i have let out space on rent to third party. I have charged GST @ 18% on rent charges. Along with rent, i am also recovered electricity expense on basis of units consumed by tenant and deposit electricity bill to Govt.

Whether I am liable to charge GST on reimbursement of electricity expenses.

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Showing Replies 1 to 9 of 9 Records

1 Dated: 2-3-2020
By:- KASTURI SETHI

In my view,it is not taxable. You have neither generated electricity nor supplied electricity.


2 Dated: 2-3-2020
By:- KASTURI SETHI

Also see the definition of 'pure agent' under Valuation Rules.


3 Dated: 2-3-2020
By:- KARAN VERMA

Sir

As per advance ruling, E square leisure pvt ltd, Maharashtra = 2019 (4) TMI 421 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, Gst is applicable on reimbursement of electricity expense along with rent.

Kindly see the ruling.


4 Dated: 2-3-2020
By:- KASTURI SETHI

I have posted the same in some other case. In this case the applicant was generating electricity.


5 Dated: 2-3-2020
By:- KASTURI SETHI

In AAR Maharashtra the party failed to prove its activity as pure agent.


6 Dated: 2-3-2020
By:- KARAN VERMA

Thank you sir, for your prompt reply and response.

In Pure agent, there is one condition to show separately on Tax invoice.

We have not shown such amount separately on Tax invoice.

Electricity meter is name of company ABC and ABC has installed sub meter in premises of tenant. Tenant reimburse electricity expense amount to landlord. And landlord paid such amount to state electricity board.


7 Dated: 3-3-2020
By:- KASTURI SETHI

Regarding the concept of 'Pure Agent' and its parameters also see reply against Issue ID 114807 dated 28.3.19.


8 Dated: 6-3-2020
By:- KARAN VERMA

Sir

Electricity bill is name of landlord, whether reimbursement of such expense from tenant fulfill the condition of pure agent when no directly bill in the name of tenant.


9 Dated: 7-3-2020
By:- KASTURI SETHI

You will have to go through the terms and conditions of the rent deed. You are intelligent and knowledgeable enough to arrive at correct decision on this issue.


1

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