KSEB notifies Exemption of GST for Key Electricity Services

Several services provided by the Kerala State Electricity Board (KSEB) that are “incidental or ancillary” related to electricity distribution and transmission will henceforth be excluded from Goods and Services Tax (GST), according to a KSEB circular.

This is consistent with the recommendation issued by the GST Council last month. Previously, services such as meter rent, new electricity connections, and deposit works were subject to 18% GST. According to a GST Council decision, the following services will henceforth be GST-exempt. According to the KSEB circular, “the taxability of various transactions, on which presently GST is collected, will undergo vast change as GST will not be applicable to most of the services provided by KSEB.”

The 54th GST Council which met in September, has recommended GST exemption for the supply of services such as application fees for providing electricity connections, rental charges against electricity meters, testing fees, labour charges from customers for moving meters or service lines, and other charges that are “incidental, ancillary, or integral to the supply of transmission and distribution of electricity.”

Meter rent and application fees will be exempt from GST. Customers will benefit from the GST exemption on electricity bills, which includes application fees for new connections. The circular has been issued, however, it has yet to be applied to billing.

The Kerala State Electricity Board (KSEB) has not yet determined which services will be exempted under this circular. Discussions with the GST Department are ongoing, and KSEB will ultimately decide how to apply the exemption.