TaxTMI 
TaxTMI 
Applicant running a canteen in a Hospital, Hospital provides power supply by a sub meter to the canteen, which bills are coming ₹ 1 lak and above per month, hospital collecting 18% GST, is it correct sir, if any exemption please provide Notification/circular and HSN/SAC Code on which they are collecting 18%
Restaurant or canteen
10 Jan 2019 
2 Replies 
1536 Views Asked by
GST on electricity distribution services: hospital may charge GST; input tax credit limited unless pure agent conditions are satisfied.
Hospital-supplied electricity to a canteen is taxable as an electricity distribution service (Heading 9969) and the hospital may correctly charge GST and remit it to the electricity supplier. Exemption notifications cited are inapplicable. Input tax credit on that GST may be restricted by clarifying notifications, and exemption from GST charging by the hospital is possible only if the hospital satisfies and evidences the conditions of acting as a pure agent: authorized third party payments, separate invoice disclosure, and supplies procured as an adjunct to its own services. (AI Summary)
Hospital-supplied electricity to a canteen is taxable as an electricity distribution service (Heading 9969) and the hospital may correctly charge GST and remit it to the electricity supplier. Exemption notifications cited are inapplicable. Input tax credit on that GST may be restricted by clarifying notifications, and exemption from GST charging by the hospital is possible only if the hospital satisfies and evidences the conditions of acting as a pure agent: authorized third party payments, separate invoice disclosure, and supplies procured as an adjunct to its own services. (AI Summary)