GST not leviable on statutory regulatory fees collected by an Electricity Regulatory Commission for tariff and licence functions.

Statutory fees received by an Electricity Regulatory Commission for tariff regulation and licensing were treated as part of its public regulatory functions, not as consideration for any activity in the course or furtherance of business. The CGST Act's concepts of "business" and "consideration" were read with Section 7, which requires a supply in the course of business, and those requirements were not satisfied on these facts. Schedule III was applied to keep such regulatory functions outside the taxable supply framework, and the definition of "services" could not override that exclusion. Accordingly, GST was held not leviable on the tariff petition fee and licence fee, and the impugned notice failed.

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Issues: Whether GST could be levied on tariff petition fee and licence fee received by the Electricity Regulatory Commission for performing statutory regulatory functions under the Electricity Act, 2003.

Analysis: The fee collected by the Commission was linked to the discharge of statutory regulatory powers, including tariff regulation and grant of licences, and not to any trade, commerce, profession, vocation, or other similar activity. The expressions "business" and "consideration" in the CGST Act must be read with Section 7, which requires a supply of goods or services for consideration in the course or furtherance of business. The Commission's regulatory functions were held to be an extension of statutory obligation and not an activity in furtherance of business. Schedule III, which excludes services rendered by a court or tribunal, was applied to treat the functions of the Commission as outside the taxable supply framework. The definition of "services" could not override that exclusion.

Conclusion: GST was not leviable on the amount received by the Commission as tariff petition fee and licence fee, and the show cause notice could not stand.

Final Conclusion: The statutory fees received for regulatory functions of the Electricity Regulatory Commission were held to be outside the scope of taxable supply under the GST regime, and the impugned notice was quashed.

Ratio Decidendi: Statutory fees received by a quasi-judicial regulatory commission for performing functions imposed by law are not received in the course or furtherance of business and therefore do not constitute taxable supply under the CGST Act.

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