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2020 (4) TMI 598 - AAR - GSTValuation - supply of service of “Transmission of Electricity” - taxability of cost of construction/ erection of Bays/ Sub-Stations, Overhead lines and Underground Cables and other charges including Pro-rata charges, supervision charges, proportionate line charges, registration fees and operation and maintenance charges, recovered by the Applicant from the consumers in assessable value - exempt from GST under Sr. No.25 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 and Notification No. 12/2017-State Tax (Rate) dated 30th June 2017 or not. HELD THAT:- Consideration for both services are charged separately and, hence, the value of “Construction Services” cannot form part of the value of service of “Transmission of Electricity” in terms of Section 15 of the Central Goods and Service Tax Act, 2017. Consequently, the said construction services cannot be treated as supply of the “Transmission of Electricity” service - the construction services provided by the applicant are not in the nature of composite supply and, therefore, the tax liability thereof has to be determined by treating the same different from the supply of transmission and distribution of electricity - The rate of GGST on aforesaid services shall be also 9% as per the corresponding Notification to the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, as amended, issued under GGST Act, 2017. Taxability - amount recovered from consumers as other charges viz. Pro-rata charges, Proportionate line charges, Registration fees and Operation and maintenance charges etc., towards expenses incurred in providing electric line or electrical plant or other facilities for the purpose of giving the supply of electricity - HELD THAT:- Pro-rata charges are recovered by them considering the augmentation to be carried out at the upstream sub-station and augmentation of existing substation. Other charges like as pro-rata charges, proportionate line charges, registration fees, operation and maintenance charges etc. recovered by GETCO from its various consumers are nothing but the consideration to enable them to create future assets for the mandate it is given. Thus, GETCO recovers said charges for providing electric line or electrical plant or other facilities for the purpose of giving the supply of electricity to the consumers. By virtue of the Entry No.25 of the Notification No.12/2017Central Tax (Rate) dated 28.06.2017, only the service of “transmission and distribution by an electricity transmission or distribution utility” was exempted from tax under the GST Acts. A comparison with regulation 3 of the Notification No.9 dated 31.03.2005 issued by the Gujarat Electricity Regulatory Commission (GERC), shows that the charges are for “any expenses that the Distribution Licensee shall be required to reasonably incurred to provide any electric line or electrical plant specifically for the purpose of giving such supply to the applicant”. Thus, the nature of services provided by GETCO in the present case is not covered under the above exemption entry of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - Electricity charges recovered for consumption of electricity are only exempted under above entry. Amount collected towards other ancillary services are taxable under GST. These services are, therefore, taxable under GST under the residual category of services i.e. “999799- Other services n.e.c.” and, hence, GETCO is liable to pay GST @ 18% on aforesaid other charges recovered from its consumers.
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