Service Tax Liability for electricity supply on Builder

[Ashwani Rustagi]

Builder or Coloniser is purchasing power in bulk from Dakshin Haryana Bijli Vitran Nigam and distributing the same to the residents of his colony by installing separate meter in each flat. Builder is collecting electricity charges from the residents by adding his administrative charges separately in the invoice.

Can a builder charge servcie tax on electricity charges? If yes, would it on entire amount of electricity invoice or only on his administrative charges?

Your advice is solicted with reference to any notification.

Regards,

Ashwani Rustagi 

[YAGAY andSUN]

Service Tax may be charged on his administrative charges.

AI Summary

Service tax on administrative charges may apply, not on electricity supply charges collected by a builder. Builder purchases power in bulk, supplies it to flats with separate meters and bills residents electricity charges plus a separate administrative charge. Service tax may be levied on the builder's administrative charges component; the electricity charge pass through is treated separately and is not indicated as taxable in the reply.