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AAR rejected application as it was not related to supplies made by applicant

AAR rejected application as it was not related to supplies made by applicant: GST Update
Recently AAR gave an important ruling dated 29 November, 2019 regarding GST charge by licensor on electricity charges in case of Barbeque Nation Hospitality Ltd. [2019] 112 24 (AAR-WEST BENGAL) which is discussed as below:

Facts of the Case
  • The applicant has taken on lease premises for the purpose of supplying of food from its restaurant, along with eating facility and ambience and other amenities. According to the agreement with licensor the applicant is required to pay the rent, security charges and maintenance charges and the applicable GST. The licensor raises separate invoices in relation to rent, maintenance charges, utility charges and electricity charges.
  • The applicant is required to reimburse the electricity charges for the electricity consumed at actuals. However, in addition to the electricity charges, the licensor changes GST thereon, claiming that the licensor is supplying electricity to the applicant.
Issue Involved
  • Whether applicant is liable to pay GST on electricity charges and whether the Licensor can collect GST from the applicant on electricity charges?
  • The Applicant's question is not related to the supplies the Applicant makes or intends to make.
  • Therefore, Authority cannot provide a decision to the Applicant in the form of an advance ruling and application is rejected in terms of section 98(2) of the GST Act. 
Please click here for order.


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