Case Law Details
In re Tasty Thrills LLP (GST AAR Gujarat)
Introduction: In a recent ruling by the Authority for Advance Ruling (AAR) in Gujarat, an application filed by Tasty Thrills LLP regarding the GST liability of electricity charges has been rejected. The applicant, operating a restaurant under the “RP Pizzeria” brand, sought clarification on the GST applicability of electricity charges imposed by the sub-lessor.
Background: Tasty Thrills LLP, located in Ahmedabad, Gujarat, operates a restaurant under a sub-lease agreement with Hardcastle Restaurants Pvt. Ltd., a Quick Service Restaurant operator under the “McDonald’s” brand. The dispute arose over the electricity charges collected by the sub-lessor from the applicant, which the sub-lessor argued were incidental charges to rent and subject to GST.
Applicant’s Argument: The applicant contended that the electricity charges were a reimbursement of actual expenses and that the sub-lessor acted as a ‘pure agent,’ with no incidental services provided. The applicant sought an advance ruling on whether the sub-lessor was liable to charge and pay GST on these electricity charges.
Legal Framework: The AAR considered relevant sections of the CGST Act, including definitions (Section 95), the application process (Section 97), and the applicability of advance rulings (Section 103). The applicant, not being a supplier of goods or services, raised questions beyond the scope of the specified issues in Section 97(2).
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