The Applicant stated that they are going to set up various public charging stations (PCS) on its own, for
charging electric vehicles (EVs), for both two-wheelers and four-wheelers. The charging of a battery in
EVs requires electricity. The Applicant will provide electric energy to these public charging stations. All
electric vehicle users can access these public charging stations for battery charging. The Applicant
would like to issue tax invoices and collects the “Electric Vehicle Charging Fee”. It includes two
components –
(a) Energy Charges – units consumed during charging
(b) Service Charges – charges against the services provided by the charging stations
The charging of a battery essentially involves the utilization of electrical energy for its conversion to
chemical energy, which gets stored in the battery. Thus, the charging of the battery of an electric
vehicle by a charging station involves a service requiring the consumption of electricity by the charging
station and earning revenue for this purpose from the owner of the vehicle. The activity does not include
the sale of electricity to any person as the electricity is consumed within the premises owned by the
charging station, which may be connected to the distribution system or otherwise for receiving
electricity. By the same logic, the activity does not involve the further distribution of transmission of
electricity”.
Therefore, it is clarified that during the activity of charging of battery for use in electric vehicles, the
charging station does not perform any of the activities namely transmission, distribution or trading of
electricity, which require a license under the provisions of the Act, hence the charging of batteries of
electric vehicles through charging station does not require any license under the provisions of the
Electricity Act, 2003”. Thus, it could be seen from the above clarification that as per the GST law,
‘Electrical Energy’ is treated as Goods, and ‘Supply of Electrical Energy’ falls outside the ambit of GST
law but in the case of EV charging at public stations (as per ARR) Supply of Electrical Energy (energy
charges) and Service Charges (for using the charging facility) together will be considered as Supply of
Service (Total Amount @18% GST).
| SW Point of View:The process of charging an EV involves the utilization of electrical energy for converting it into chemical energy, stored within the battery. This entire process takes place within the premises owned by the charging station and does not entail selling electricity to any individual. As such, the electricity consumed during the ‘act of charging an EV’ is not the same as the ‘supply of electricity’ and cannot be exempted from the GST law. ‘Service Charges’ together with the ‘Electricity Usage’ will be treated as the ‘Supply of Service’ and will fall under the ambit of the GST law. |
Source: 2023 (7) TMI 869 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA
