2026-VIL-246-P&H
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SGST High Court Cases

GST – Discharge of regulatory functions - Levy of GST on the amount received by the petitioner as Tariff petition fee and license fee - Whether the regulatory functions discharged by the Electricity Regulatory Commissions, such as regulation of tariff, inter-State transmission of electricity, and issuance of licenses, can be construed as activities undertaken or functions discharging in furtherance of business, thereby attracting the levy of GST – HELD - The regulatory functions discharged by the Electricity Regulatory Commissions cannot be construed as activities undertaken or functions discharging in furtherance of business under the GST Act. The Delhi High Court in the matter of Central Electricity Regulatory Commission v. DGGI held that the regulation of tariff, inter-State transmission of electricity, or issuance of licenses cannot be considered as activities undertaken or functions discharging in furtherance of business, but are an extension of the statutory obligation placed upon the Commissions to regulate these subjects - The regulatory power wielded by the Commissions under the Electricity Act would not fall within the ambit of the definition of "business" under the GST Act, as it is not a trade, commerce, manufacture, profession, vocation, adventure, wager, or any other similar activity, whether or not it is for a pecuniary benefit. The payments received by the Commissions in the form of fees are not an outcome of an inducement to supply goods or services, and therefore, do not constitute "consideration" under the GST Act - Furthermore, the Schedule III of the GST Act expressly excludes services rendered by a Court or Tribunal, and the Electricity Regulatory Commissions, being quasi-judicial bodies, are covered under this exclusion - The impugned Show Cause Notices are set aside and the petition is allowed
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