Consideration as inducement: regulatory fees for tariff and licence functions are not taxable supplies and fall outside GST coverage.

Fees levied by a State Electricity Regulatory Commission for tariff petitions and licence functions under Section 86 of the Electricity Act do not qualify as a supply in the course or furtherance of business under the Central Goods and Services Tax framework because the statutory definitions of business and consideration target trade-like activities and inducements to supply, which regulatory and quasi judicial functions lack. Schedule III's exclusion of services of courts and tribunals and prior reasoning treating tariff regulation and licensing as statutory obligations support treating such fees as non commercial; accordingly they are not liable to GST and relief was granted.

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Issues: (i) Whether fees received by a State Electricity Regulatory Commission (tariff petition fee and licence fee) for discharging functions under Section 86 of the Electricity Act, 2003 constitute a supply of goods or services in the course or furtherance of business and are liable to Goods and Services Tax under the Central Goods and Services Tax Act.

Analysis: The dispute turns on the scope and interaction of the statutory definitions of "business" and "consideration", the requirement in Section 7 that a taxable supply be in the course or furtherance of business, and the exclusions in Schedule III of the Central Goods and Services Tax Act. Applying the statutory framework, the definitions of "business" and its sub-clauses are directed at trade, commerce, professions and analogous activities and do not encompass the regulatory powers vested in a Commission constituted under the Electricity Act, 2003. The concept of "consideration" must be read in the context of an inducement to supply goods or services, which is not satisfied by fees levied as part of statutory regulatory or adjudicatory functions. Schedule III explicitly excludes services rendered by a court or tribunal; the regulatory and adjudicatory functions of a Commission are indivisible and operate in a quasi-judicial statutory sphere rather than as commercial supplies. Prior authoritative reasoning establishing that tariff regulation, licensing and inter-state transmission regulation are extensions of statutory obligation and not commercial activities applies to the present facts and leads to the same legal characterisation.

Conclusion: The fees received by the Commission for tariff petitions and licence-related functions under Section 86 of the Electricity Act, 2003 are not supplies in the course or furtherance of business for the purposes of the Central Goods and Services Tax Act and therefore are not liable to GST; relief granted to the petitioner.

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