2026-VIL-142-AAR
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SGST Advance Ruling Authority

GST – West Bengal AAR - Reimbursement of electricity charges at actual – Value of supply, Pure agent concept, Rule 33 of CGST Rules, 2017 – Applicant engaged in providing common area maintenance and facility management services for commercial building also pays electricity charges to distribution company and proposes to recover actual electricity charges from unit holders based on consumption without any profit element - Applicant installed sub-meters for normal consumption and HVAC operations in individual offices and proposes to recover electricity charges at unit rate charged by distribution company with common area consumption distributed among unit holders on basis of super-built-up area - Whether recovery of electricity charges at actual cost based on consumption as charged by electricity distribution company without markup including electricity for HVAC operations and common area consumption qualifies as reimbursement in capacity of pure agent and whether GST is leviable on same – HELD - Supply of electricity is integral part of maintenance and management services provided by applicant. Supply of electricity is ancillary supply bundled with principal supply of maintenance service. Even if electricity is billed separately supplies constitute composite supply - However where applicant charges for electricity on actual basis charging same amount for electricity from unit holders as charged by State Electricity Board or DISCOM and applicant proposes to change billing pattern to charge unit holder same amount as charged by DISCOM for electricity consumed based on sub-meter reading with no markup or profit element charged and break-ups of electricity charges shown separately, the explanation provided in the second sentence of clause 3.3 of Circular No. 206/18/2023-GST dated 31.10.2023 is squarely applicable to the applicant - Recovery of electricity charges at actual cost based on consumption as charged by electricity distribution company without markup including electricity attributable to HVAC operations and common area consumption can be deemed to be recovery in capacity of pure agent in terms of CGST Act, 2017 read with relevant portions of said Circular. Accordingly, such value is excluded from total value of supply made by applicant and no GST is levied on excluded part – Ordered accordingly
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