Query Regarding GST Applicability on Electricity Charges Reimbursed by Owner

[milan bamal]

A warehouse owner raises a monthly rent bill for the warehouse to the tenant. The owner also pays the electricity bill every month and recovers the electricity charges from the tenant. The owner raises a separate reimbursement bill for the electricity charges. In this case, is GST applicable on the electricity amount recovered from the tenant?

If the answer to the above query is "No", and the owner charges GST on the reimbursement invoice for electricity charges, would there be any issue ???

[Sadanand Bulbule]

It is a repeated query by the same gentleman vide Issue ID: 120900 dated 02/05/2026. It is already answered.

[KASTURI SETHI]

Dear Sir,

I think that the querist has posted the query again because of divergent views of the experts in Issue ID 120900 dated 2.5.2026..

[Raam Srinivasan Swaminathan Kalpathi]

This issue stands clarified by department vide their Circular 206/18/2023-GST, para 3. Exact reimbursement will not attract GST.

[Shilpi Jain]

Assuming tax is not liable on the electricity charges collected from the tenant, even if GST is charged and paid by tenant there should not be any issue since there is no undue benefit claimed by anyone in this case but a situation of excess tax going to the Exchequer.

AI Summary

Exact electricity reimbursement from a tenant does not attract GST when separately recovered by the warehouse owner.
GST treatment of electricity charges separately recovered by a warehouse owner from the tenant turns on whether the recovery is an exact reimbursement. Departmental clarification is cited as establishing that an exact reimbursement of electricity charges does not attract GST. The issue concerns distinct billing of warehouse rent and electricity reimbursement.