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sale of electricity, Goods and Services Tax - GST

Issue Id: - 116091
Dated: 3-3-2020
sale of electricity

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I m generating electricity through solar power plant, 50% is used by me and remaining 50% sold to tenant

whether gst applicable on sale of power to tenant.

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Showing Replies 1 to 3 of 3 Records

1 Dated: 3-3-2020

(1) Electricity is a goods falling under Chapter/Heading/Sub-heading No. 2716 00 00 of Customs Tariff Act. A supply of electricity is exempted vide Notification No.2/17-CT(R) dated 28.6.17 as amended (serial no.104). It is relevant to mention here that as per Section 2(23) of Electricity Act, 2003, the words, 'electricity' and 'electrical energy' convey the same meaning and message.

(2) Transmission or distribution of electricity by an electricity transmission or distribution utility is exempt vide Notification No.Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended at serial no.25 classified under SAC 9969.

(3) Transmission or distribution of electricity (SAC 9969) by other than electricity transmission or distribution utility is taxable vide Notification No.11/17-CT(Rate) dated 28.6.17 as amended (at serial no.13 ) GST@ 18% ( CGST 9% & SGST 9%).

Your activity falls at serial no.3 above. Hence GST is applicable for supply of electrical energy to tenant. No exemption is available to you, being non-transmission or distribution utility.

2 Dated: 3-3-2020

Thank you sir.

I have one more view, generation and distribution of electricity are two different things. Generation of electricity is supply of goods and transmission/distribution is supply of service.

My intention is to sale electricity to tenant and this is covered under 0% rate, further electricity is not sold without transmission, then it becomes composite supply.

When principal supply i.e sale of electricity is nil rated , then ancillary supply which is transmission of electricity also becomes exempt due to composite supply and gst rate of principal supply will attract.

Whether i m correct.

3 Dated: 3-3-2020

In this scenario, Renting of Immovable Property is a principal supply and transmission or distribution of electrical energy is an ancillary supply.

If you do not agree, you must apply to Advance Ruling Authority. It will be safer.


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