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Issues: Whether GST could be levied on the petition fee, ARR processing fee and licence fee received by the Commission for performing regulatory functions under the Electricity Act, 2003.
Analysis: The fee received by a Commission for regulating tariff, transmission and grant of licences is not an activity in the nature of trade, commerce, manufacture, profession, vocation or any other similar activity, and therefore does not amount to "business" within the meaning of the CGST Act. The payment is not a consideration for supply in the course or furtherance of business, and the breadth of the definition of services cannot override the statutory scheme, including the exclusion for services rendered by a court or tribunal in Schedule III. The regulatory and adjudicatory functions of a Commission are exercised as part of a statutory, quasi-judicial framework and cannot be treated as taxable supplies merely because fees are collected in connection with those functions.
Conclusion: GST could not be levied on the amounts received by the Commission towards petition fee, ARR processing fee and licence fee, and the impugned show cause notice was unsustainable.
Ratio Decidendi: Statutory regulatory and quasi-judicial functions performed by a Commission under the Electricity Act are not activities in the course or furtherance of business and fees collected for such functions do not constitute taxable consideration for a supply of services under the CGST Act.
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