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Question ID : 38077


As per Kolkata High Court decision in the case of Srijan Realty (P) Ltd., the landlord is liable to pay service tax on electricity charges collected from tenants based on sub-meters installed. I presume this decision is hold good under GST also. If yes, what is SAC to be mentioned. I understand the Supreme Court has given finding that the electricity can be classified as a goods. Does it mean we should quote HSN not SAC.

Posted by Ethirajan on Apr 04, 2019

Filed Under GST

Answer ID : 76459

Yes this decision should hold good for GST as well. The SAC to be mentioned shall be SAC for rental service. In the current case landlord is providing services to the tenant by providing electricity . Hence SAC is required to be mentioned. However if an electricity manufacturing & distribution company is billing to their customer subject to applicability of GST, in that situation HSN may be required to be mentioned.

Posted by CA. JHA SHANKAR KUMAR on Apr 04, 2019
Answer ID : 76465

The rule which stated that Service Tax shall be charged on reimbursement has been discarded by Hon’ble Supreme Court under Service tax law only. However, the valuation provisions under GST law (Section 15 and rules made thereunder) still provides that ‘incidental reimbursable expenses’ are to be considered for charging GST. Accordingly, reimbursement of electricity charges along with Rental/Maintenance services can be said to be chargeable to GST on the basis of concept of Composite Supply until and unless the very changeability as provided in Section 9 of GST Act is discarded by Courts. So along with the rental it will be sSCN

Posted by CA. BISHT RAKESH on Apr 05, 2019