Additional Director Directorate General of GST Intelligence (DGGI) & Anr. Vs Central Electricity Regulatory Commission (Supreme Court of India)
SC dismisses SLP against Delhi HC ruling that GST is not leviable on license fees collected by Electricity Regulatory Commissions: Supreme Court of India
Summary: The Supreme Court of India dismissed a Special Leave Petition (SLP) filed by the Directorate General of GST Intelligence (DGGI), upholding the Delhi High Court’s ruling that GST is not applicable to license fees collected by Electricity Regulatory Commissions. The case stemmed from a demand for service tax and GST on license fees collected by the Central and Delhi Electricity Regulatory Commissions, which the GST authorities contended were taxable “supply of services.” The regulatory bodies challenged this demand, arguing their functions were quasi-judicial and not a business activity subject to GST. The Delhi High Court had previously ruled in favor of the Commissions in the case of Central Electricity Regulatory Commission Vs Additional Director Directorate General of GST Intelligence (DGGI) & Anr. , stating that granting a license is a statutory obligation, not an activity in the course of business. The court also held that these Commissions perform quasi-judicial functions with the characteristics of a tribunal, and as such, their services are excluded from the definition of “supply” under Schedule-III of the CGST Act. The Supreme Court found no reason to interfere with this decision, agreeing that the regulatory functions do not fall within the ambit of “business” and the license fees do not constitute “consideration.” This ruling solidifies the legal position that statutory commissions carrying out regulatory and quasi-judicial duties are not subject to GST on the fees they collect for licenses.
