Electricity is Not “Fuel” under GST Rate Notification

The Gujarat Authority for Advance Ruling delivered a significant ruling concerning GST classification and applicable tax rates for operation and maintenance services involving electric buses deployed under the National Electric Bus Program. 

The Authority held that electricity used for operating electric buses cannot be regarded as “fuel” for purposes of Entry No. 10(i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

Consequently, rental services involving electric buses where electricity costs are not separately treated as “fuel cost” would not qualify for the concessional GST rate applicable to passenger transportation services where fuel cost is included in consideration. 

The Authority accordingly ruled that the applicant’s services involving operation, maintenance, charging, and deployment of electric buses would fall under residual Entry No. 10(iii) attracting GST at 18%.