GST on Electricity: Is It Covered Under GST?

Electricity powers our homes, businesses, and industries. But when it comes to taxes, many people are confused about whether electricity is taxed under GST. In this blog, we’ll break down what the law says about the gst on electricity, how it applies, and where it doesn’t.

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    GST Rates

    Is Electricity Covered Under GST?

    The short answer is: No, electricity supply is not covered under GST.

    • Electricity is classified as a basic necessity, and the government has kept it outside the GST regime.
    • No GST is charged on your electricity bill from your utility provider.
    • Electricity provided by government-authorized distribution companies is exempt from GST.

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    What About Electricity-Related Services?

    Even though electricity itself is exempt, services related to electricity may attract GST. Here’s how:

    • Installation and Maintenance: Electrical wiring, transformer setup, or repair work may be taxed at 18% GST.
    • Electricity Connection Charges: Utility companies may charge for new connections or upgrades — these may also attract GST.

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    GST on Electronic Items

    It’s important not to confuse electricity with electronic items. Products like fans, refrigerators, and inverters are subject to GST.

    Product Type Approximate GST Rate
    Household Appliances 18%
    Air Conditioners 28%
    LED Lights 12%
    Inverters & UPS systems 18%

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    What About the GST on Electricity Bills for Businesses?

    • Electricity bills from government-authorized providers remain exempt from GST.
    • Private supply, generator power, or DG set rentals may attract GST at applicable rates (usually 18%).

    So, while gst on electricity bill doesn’t apply for normal usage, Input Tax Credit can still be claimed on related services if used for business purposes.

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    Conclusion

    While electricity itself is not taxed under GST, services and products connected to it may be. Whether you’re a household consumer or a business, understanding this difference helps you manage costs and stay compliant.

    So, the next time you check your gst on electricity bill, remember — the main electricity charge is exempt, but it’s smart to watch for GST on any extra services or equipment.

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