GST Not Applicable on Regulatory Fees of Electricity Commission | HC

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GST regulatory fees electricity commission

Case Details: Karnataka Electricity Regulatory Commission vs. Joint Commissioner Central Tax [2026] 185 taxmann.com 9 (Karnataka)

Judiciary and Counsel Details

  • S.R. Krishna Kumar, J.
  • Ashwin G. Raj, Smt. Keerthi Krishna Reddy & Abhishek K., Advs. for the Petitioner.
  • Akash B. Shetty & K.S. Bheemaiah, Advs. for the Respondent.

Facts of the Case

The petitioner was issued a show cause notice (SCN) proposing the levy of GST on regulatory fees collected in discharge of its statutory functions, which was subsequently confirmed by order. It was contended that its regulatory and adjudicatory functions were statutory and did not constitute ‘business’ under GST and were excluded under Schedule III, and that such fees were not consideration. Reliance was placed on ‘Central Electricity Regulatory Commission v. Additional Director Directorate General of GST Intelligence (DGGI) [2025] 170 taxmann.com 406 (Delhi)’. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Section 7 read with Schedule III of the CGST Act excludes statutory functions performed by regulatory authorities from the scope of ‘supply’ and that Section 9 cannot be invoked in the absence of a taxable supply. It held that the regulatory and adjudicatory functions of electricity commissions do not constitute ‘business’ and that fees collected for such functions are not consideration in the course or furtherance of business. It was further held that notifications issued under the GST framework cannot override the statutory exclusion provided under Schedule III. It was concluded that the SCN and the confirmatory order issued by the jurisdictional officer under CGST were without jurisdiction and liable to be quashed.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied