TaxTMI 
TaxTMI 
Whether electricity produced by sugar mill by using by-product of sugar production (bagasse) and further supplying such electricity to electricity grid, comes under preview of GST or not.
gst on electricity produced and supplied by sugar mills to electricity grid
12 Mar 2025 
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GST treatment of electricity from bagasse: exemption possible, but input tax credit reversal and distribution conditions require analysis.
Whether electricity generated from bagasse and supplied to the grid is taxable under GST depends first on whether that supply is characterised as a sale of electricity (with exemptions applying) or as a non sale adjustment; second, on whether the mill must effect input tax credit reversal because inputs/capital goods are used for exempt or mixed supplies; and third, on whether conditional exemptions for transmission or distribution apply by satisfying the definition of an electricity transmission or distribution utility under the notifications. (AI Summary)
Whether electricity generated from bagasse and supplied to the grid is taxable under GST depends first on whether that supply is characterised as a sale of electricity (with exemptions applying) or as a non sale adjustment; second, on whether the mill must effect input tax credit reversal because inputs/capital goods are used for exempt or mixed supplies; and third, on whether conditional exemptions for transmission or distribution apply by satisfying the definition of an electricity transmission or distribution utility under the notifications. (AI Summary)