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2020 (1) TMI 633 - AAR - GST100% EOU - Classification of supply - supply of goods or supply of services - supply of electricity - supply of utilities/leasing - separate supplies or composite supplies? - input tax credit - HELD THAT:- Sale or consumption of electricity is a State subject mentioned at Serial No. 53 of List II of Seventh Schedule to the Constitution of India under Article 246 of the Indian Constitution. This position has not been altered by the 101st Constitution Amendment Act, 2016 and therefore, electricity remains outside the purview of the GST - The Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017 pertains to goods, the intra-State supply of which is exempted under the GST Act. The Entry No. 104 of this notification is regarding Electrical Energy, This suggests that Electrical Energy is a goods and not a service. There is also no doubt that electricity and electrical energy are one and the same thing - It is therefore, clear that electricity is a goods and not a service. Whether supply of electricity via DG sets is a goods or service? - HELD THAT:- The DG set belongs to the Agilent Technologies, the maintenance charges are also borne by the Agilent Technologies, the expenses record pertaining to the DG set is also maintained by Agilent Technologies. Therefore, the authority has no hesitation in concluding that the provision of electricity supply/ power back-up via DG set is in the form of a service and not goods - the electrical supply is liable to GST to the extent it is supplied through DG set. Whether the supply of electricity and supply of utilities/leasing are separate supplies or composite supplies? - HELD THAT:- In the instant case, the supply is made by a taxable person and the number of supplies are also multiple. But as discussed earlier, the supply of electricity to the extent of it being supplied through grid is exempt from GST and, therefore, the condition of two or more taxable supplies is not satisfied. Further, the supply of utilities and supply of electricity are neither naturally bundled together nor are they supplied in conjunction with each other. Also, neither of the two supplies i.e. utility services and electricity supply can be termed as a principal supply and the other one being a natural ancillary - the supply of utility services and electricity supply are separate supplies. The provision of electric supply by way of DG set forms part of the utility services taxable at 18% whereas the supply of electricity by way of grid is exempt from GST. Input tax credit charged on renting services and electricity supply - HELD THAT:- Regarding input tax credit with respect to electricity supply, it is observed that since the grid supplied electricity is exempt from GST, the issue of credit availability does not arise - As regards, the tax on supply of electricity through DG set, the Authority is of the opinion that the applicant is entitled to credit of input tax paid with respect to tax paid on availing the said service.
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