The Haryana Authority for Advance Ruling (AAR), observed that the Common Area Electricity charges collected, on Actual Basis from the Residents of Apartment Complex attracts 18% GST.
The Applicant, M/s The Close North Apartment Owners Association, is engaged in providing maintenance service and other related services to its members like managing day to day problems of the residents, organising events, managing facilities in the apartments and safeguarding the rights of residents.
The applicant stated that electricity supplied by the State Electricity Boardand there is a Single Point Bulk connection or a common electricity meter for theentire complex which is in the name of the Applicant. The Applicant has, in turn,installed the sub-meters in the premises of the individual flat owners for measuringthe electricity consumption of each such unit and also a separate sub-meter isinstalled for units consumed towards common area electricity.
The applicant has sought advance ruling on whether GST is applicable on the Common Area Electricitycharges collected, on actual basis, by the Applicant from theresidents of the apartment complex, or not?
The applicant recovers electricity charges for use incorridors, pathways, gardens, club house, swimming pool, lifts etc. from the eachindividual user on per square feet basis based on the super built-up areas of eachflat. The electric supplied by the State Electricity Board for the entire complexsingle point connection and common electricity meter is installed for it.
Since, RWA has obtained a Single Point Bulk supply connection under para4.1 of the Electricity Regulations 2013 amended vide Electricity Regulations 2020the distribution of electricity within the apartment complex would be owned and managed by it and GST would not leviable on the CAE charges recovered by the Applicant on actual basis from the individual users.
The Two- Member Bench consisting of Sunder Lal, Member CGST and Kumud Singh, Member SGST, observed that “18% GST is applicable on the Common Area Electricity charges collected, on actual basis, by the Applicant from the residents of the apartment complex.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
