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TMI Blog2025 (3) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the concerned officer, the jurisdictional officer or the applicant within a period of six months from the date of the order. Provided that, no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the applicant or the appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act, this advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only. (a) On the applicant who had sought it in respect of any matter referred to in sub-Section (2) of Section 97 for advance ruling; (b) On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of both the CGST Act and the TGST Act are identical except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the corresponding provision under the TGST Act and vice-versa. Further, for the purposes of this Advance Ruling, the expression 'GST Act' would mean a common reference to both CGST Act and TGST Act. Brief facts of the case: 3. Ms. Duet India Hotels (Hyderabad) Private Limited ("Duet India/Lessor") are engaged in the business of running hotels. They are owner of 'Holiday Inn - Express & Suits Hyderabad' ("the Hotel"). The hotel is managed by the Intercontinental Hotel Group, having its principal pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese do not qualify as a supply under GST. Further, the Lessee has also contended that even if these qualify as supply, the supply of electricity and water are specifically exempted from payment of GST. 6. In view of the above, Duet India had filed application for obtaining the advance ruling before Telangana State Authority for Advance Ruling, Hyderabad in respect of following questions: a. Whether GST is applicable on electricity and water charges, which are being collected at actual by the Lessor from the Lessee? b. If answer to Q. No.(a) is yes, then what is the nature of supply and applicable rate of GST? 7. The Authority for Advance Ruling, vide the impugned order, had given the following advance ruling on the questions raised. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als by the Lessor from the Lessee. If so, what is the nature of supply and applicable rate of GST? 11. Before proceeding further in the matter, it would be pertinent to note that Duet India believes that the supply of electricity and water is part of the rental services and thus should attract GST as rental services (Para 11 of the application for advance ruling). However, as the Lessee does not agree with this position, the subject application has been preferred for advance ruling. 12. To appreciate the factual matrix, following clauses of the agreement entered between Lessor and Lessee are relevant: 12.1 Clause 7 of Article 4 of the license agreement (furnished by Duet India along with application): In consideration of the licensor hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of a composite supply of services by the Lessor to the Lessee. 13.2 This aspect has been amply clarified by CBIC, vide Circular No: 206/18/2023-GST dt: 31.10.2023. Para 3.2 thereof states that whenever electricity is being supplied bundled with renting of immovable property and/ or maintenance of premises, as the case may be, it forms a part of composite supply and shall be taxed accordingly. The principal supply is renting of immovable property and the supply of electricity is an ancillary supply. Even if the electricity is billed separately, the supplies will constitute a composite supply and therefore, the rate of the principal supply i.e., GST rate on renting of immovable property would be applicable. 13.3 In view of the above clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t availing the renting service. Thus, no option is available to the Lessee. Further there must be an authorisation by Lessee on Lessor when he makes payment to Electricity Department. In the present case, there is no sub-meter in the name of Lessee. Hence, the question of Lessee authorising the Lessor to pay the charges does not arise. As such, the prescribed conditions are not fulfilled for Duet India to be treated as a pure agent. 15.1 We also observe that the Member-State has in his ruling held that electrical energy and water are exempted from tax under Notification No: 02/2017 dt: 28.06.2017 (vide SI No: 104 and SI No: 99 of said Notification respectively). 15.2 The services of transmission of electricity and distribution of electric ..... X X X X Extracts X X X X X X X X Extracts X X X X
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