Electricity Regulatory Commissions are not Suppliers: Karnataka HC Quashes ₹13.42 Cr GST Demand on KERC [Read Order]
The Karnataka High Court acceded to a Delhi High Court ruling where it was held that statutory electricity regulators do not render “supply” under the GST law.
The Karnataka High Court has set aside a Goods and Services Tax ( GST ) demand of ₹13.42 crore raised against the Karnataka Electricity Regulatory Commission (KERC), holding that electricity regulatory commissions are not “suppliers” under the Central Goods and Services Tax Act, 2017.
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The dispute arose from a show cause notice issued to KERC proposing a GST demand of ₹13,42,66,423, which was later affirmed by an order issued by the Joint Commissioner, CGST, Bengaluru North Commissionerate.
The petitioner challenged both proceedings before the High Court through the present writ petition seeking quashal of the show cause notice and the consequent demand order.
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Keerthi Krishna Reddy appeared for the petitioner while Akash B. Shetty appeared for the CGST authorities, while K.S. Bheemaiah represented the Union of India.
The single-judge Bench comprising Justice S.R. Krishna Kumar took note of the Delhi High Court’s Division Bench ruling in Central ElectricityRegulatory Commission and Delhi Electricity Regulatory Commission (2025 TAXSCAN(HC) 207) where it was held that electricity regulatory commissions do not engage in taxable supply under Section 9 of the CGST Act.
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The Karnataka High Court further noted that Justice Yashwant Varma and Justice Dharmesh Sharma had in that judgment referenced Section 9 of the CGST Act which provides for levy of CGST on intra-State supplies of goods or services or both. The Bench held that the ratio applied squarely to KERC, thus warranting quashing of the demand order and the show cause notice.
Accordingly, the Court allowed the writ petition and quashed the impugned order dated as well as the show cause notice, granting relief to KERC from the ₹13.42 crore GST demand.
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