In re Harish Chand Modi (GST AAR Rajasthan)
Q. (a) Whether reimbursement of electricity expenses, on actual basis, by the lessee to lessor would form part of taxable value?
Ans:- Yes. In the instant case, reimbursement of electricity expenses, on by the lessee to lessor would form part of taxable value as it is not on actual basis.
(b) If the answer to above is no, whether GST is levied on the reimbursement of expenses from the lessee by the lessor at actuals?
Ans:- GST is levied on the reimbursement of expenses in the instant case.
(c) If answer to the above is yes, what is the rate of GST applicable to said reimbursement of expenses?
Ans:- Since the principal supply provided by the applicant (here Lessor) is of Renting & Leasing of Immovable Property (sac codes- 997212), it will attract GST @ of 18% (SGST-9%. CGST-9%) of the taxable value of supply.
Read AAAR Order:- GST payable on Reimbursement of electricity expenses if not on actual basis: AAAR
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
The issue raised by M/s HARISH CHAND MODI, 39, Bachhraj ji ka Bagh 11th A Road, Sardarpura, JODHPUR- 342003, Rajasthan, – (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2)(e) given as under: –
(e) determination of the liability to pay tax on any goods or services or both;
SUBMISSION AND INTERPRETATION OF THE APPLICANT;
(1) That the appellant (hereinafter referred as “appellant” or “applicant” or “lessor”, or “landlord”) is a registered assessee under GST laws having GSTN – 08ACEPM8844J1X4.
(2) That the appellant had undertaken construction of its building and decided to give different floors or offices of its building on rent or lease.
(3) That the appellant had entered into an agreement with its tenant and the copy of the rent agreement is attached herewith for your ready reference.
(4) That in accordance with the said rent agreement appellant had given 5,437 sq feet (3,526 sq ft on 7th floor and 1,911 sq ft on 6th floor) at its premises “Shanti One”, Plot No 39, 11th A Road, Bachraj ji ka Bagh, jodhpur-342003 (Rajasthan) hereinafter referred as “the said premises”, to the tenant on lease for a period 9 years and 11 months divided in 9 terms of 1 year each and 1 term of 11 months.
(5) that the tenant needs to pay following amount in accordance with the rent agreement as attached herewith, the details of which is as under
