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2020 (1) TMI 1431 - AAAR - GSTSupply of services - Deposit Work undertaken - ancillary or incidental to the principal supply of transmission services or not - composite supply of services - applicability of exemption given to transmission or distribution of electricity by an electricity transmission or distribution utility - eligibility of ITC. HELD THAT:- The Supply of Electricity is a continuous supply while the other service required for development of transmission facilities, supervision charges etc. are not continuous supplies. Supply of electricity can also be made without provisions of these services. These services are provided by the appellant on specific request of the customers and not provided in its normal course of business to all the consumers - For a supply to be consider as a composite supply, its constituent supplies should be so integrated with each other that one cannot be supplied in the ordinary course of business without or independent of the other. In other words they are naturally bundled. The concept of the “Naturally Bundled”, used in Section 2 (30) of the CGST Act 2017, lays emphasis on the fact that the different element in a composite supply are integral to the overall supply and if one of the element is removed the nature of supply will be affected. “Deposit Work” undertaken by appellant is not an integral part of supply of services of transmission or distribution of electricity and exemption given under Entry No. 25 of the exemption notification for services by way of transmission or distribution of electricity by an electricity transmission or distribution utility will not be applicable on applicant - the works regarding extension of electric line, electric plant, commissioning of new sub- station etc. are part and parcel of the activity of “Transmission of Electricity”. The deposit work undertaken by the appellant is part and parcel of the transmission and distribution of electricity and the same cannot be completed without the said deposit work - the service provided by the appellant are in nature of composite supply in terms of Section 8 of the CGST Act, 2017 and Transmission and distribution of electricity being the principal supply.
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