TMI Blog2018 (6) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... t is found that, M/s TPADL is not eligible to avail the exemption from levy of GST under Entry No. 25 of Notification 12/2017 - Central Tax (Rate) dated 28.06.2017 bearing description 'Transmission or distribution of electricity by an electricity transmission or distribution utility' with respect to the non-tariff charges recovered from their customers and is liable to pay tax on the aforesaid made from its customer. Ruling:- The Services provided by M/s TPADL with respect to the non-tariff charges recovered from their customers are not eligible for exemption and M/s TPADL is liable to pay tax on the aforesaid recovery made from their customers. - ADVANCE RULING NO. RAJ/AAR/2018-19/02 - - - Dated:- 11-5-2018 - Nitin Wapa, Member and Sudhir Sharma, Member Present for the Applicant - Shri Varun Sharma, FCA, Authorised Representative RULING (A) SUBMISSION OF APPLICANT 1. M/s TP Ajmer Distribution Limited ('TPADL' or 'Applicant' or 'the Company ); having Goods and Services Tax ( GST') Registration No. 08AAGCT2158P1ZR and is engaged in the business of distribution of electricity; has submitted that, 1.1 The Tata Power Company Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security deposit for the meter installed at the customer's premises Rent for metering equipment Rent is collected for metering equipment for industrial consumers Meter Testing Fees In case a consumer complains about a defect on the meter, a fee is collected for testing the meter ABT compliant meter ABT means Availability Based Tariff Meters. This is fee for ensuring compliance as per the regulatory norms Change of meter In case of a change in the meter, charges are recovered from the consumer Labour charges for shifting of meter in the same premises In case there is a shifting of the meter for any reasons, labour charges are recovered from the consumer Cost of Meter Box / Panel In case of change in the meter box or panel, charges are recovered Re-sealing Charges ( if found broken) At the time of meter installation, a seal is put on the meter. In case the seal is broken then the same needs to be replaced. Charges are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the tariff and non-tariff charges, specify the obligations of a licensee etc. 1.4 The applicant has also submitted that under the GST regime, as per Entry No. 25 of Notification 12/2017 - Central Tax (Rate) dated 28.06.2017, exemption from levy of GST has been granted to the activity of Transmission or distribution of electricity by an electricity transmission or distribution utility. Corresponding notifications have also been issued under the IGST Act and SGST Act - Notification No. 9/2017 - Integrated Tax (Rate) dated 28.06.2017 and SGST-No. F 17(131) ACCT/GST/2017/6822 dated 29.06.2017 (B) ISSUE FOR DETERMINATION The question/ issue before the authority of advance Ruling (AAR) for determination are: a. Whether TPADL is eligible to avail the exemption from levy of GST under Entry No. 25 of Notification 12/2017 - Central Tax (Rate) dated 28.06.2017 bearing description 'Transmission or distribution of electricity by an electricity transmission or distribution utility' with respect to the non-tariff charges recovered by TPADL from its customers? b. Whether TPADL is liable to pay tax on the aforesaid recovery made from its customer? (C) SUBMISS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided below: Serial No. 2(q) - Central Transmission Utility shall have the same meaning as assigned to it in clause (10) of section 2 of the Electricity Act, 2003 (36 of2003); Serial No 2(p) - Central Electricity Authority means the authority constituted under section 3 of the Electricity (Supply) Act, 1948 (54 of 1948); Serial No. 2(zzi) - State Electricity Board means the Board constituted under section 5 of the Electricity (Supply) Act, 1948 (54 of 1948); Serial no. 2(zzj) - ''State Transmission Utility shall have the same meaning as assigned to it in clause (67) of section 2 of the Electricity Act, 2003 (36 of 2003); 4. The applicant has also submitted that, 4.1 From the provisions of the CGST Act mentioned above in Para 2, the service of transmission or distribution of electricity by an electricity transmission or distribution utility is exempt under Exemption Notification. As per the said Exemption Notification, the benefit of the exemption can be availed only when the below mentioned conditions are satisfied: a) The service shall be the service of transmission or distribution of electricity, and b) The said service shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in light of the provisions of clarification in detail . He argued that issues relating to Security deposits against electricity consumption and meters, cheque dishonour fees and delayed payment charges are not part of the considerations for the supplies hence non taxable. He further requested that the case may be decided at earliest on the basis of submission already made. (E) Issues to be decided: 6. The issue involved in this case is, (a) Whether TPADL is eligible to avail the exemption from levy of GST under Entry No. 25 of Notification 12/2017 - Central Tax (Rate) dated 28.06.2017 bearing description 'Transmission or distribution of electricity by an electricity transmission or distribution utility' with respect to the non-tariff charges recovered by TPADL from its customers? (b) Whether TPADL is liable to pay tax on the aforesaid recovery made from its customer? (F) Findings: 7.1. As per Sr. No. 25 of table under notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 GST. (Notification No.9/2017 Integrated Tax (Rate) dated 28.06.2017 and SGST No. F12 (56)FD/Tax/2017-Pt-I-50 dated 29.06.2017) Transmission or distribution of ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Government or a State Government: (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply ; Therefore, the refundable security deposit against Electric Consumption and Electric Meter, which are collected from customers, will not be treated as consideration for the supply. Only when the security deposits are applied as consideration (such as forfeiture, offsetting against future progress payment, etc.) does it becomes taxable. 7.4 CHEQUE DISHONOUR FEE - As per clause 5 (e) schedule II of CGST Act, 2017 (5) The following shall be treated as supply of services, namely: - (e) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; Thus if any person tolerates an act o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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