TMI Blog2018 (11) TMI 1758X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as distribution of electricity, energy cannot be effectively accomplished without installation of infrastructures such as substations, transmission towers and installation of meters to record electricity consumption for periodic billing and recovery of charges etc. The appeals filed by the assessee are allowed. - Ruling No. 11/2018-19 in Application No. 07/2018-19 - - - Dated:- 20-11-2018 - Shri Vipin Chandra and Amit Gupta, Members Shri Rajesh Gupta, CA, for the Assessee ORDER This is an application under sub-section (1) of Section 97 of the CGST/SGST Act, 2017 (hereinafter to be referred as Act ) and the rules made thereunder filed by General Manager (Finance), Uttarakhand Power Corporation Ltd., Dehradun seeking an advance ruling on the question of classification and rate of GST on various receipts received by the applicant on the count of distribution of electricity. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 190 in relation to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nature of Sums Collected/ Receipt Basis for Collection/Receipt Remark 1. Charges for distribution and supply of electricity such as fixed charge, demand charge, energy charge, fuel charge adjustment, excess load demand charge, low power factor surcharge, low voltage surcharge/high voltage rebate, wheeling charge, cross subsidy surcharge and additional surcharge, etc. Rate Schedule annexed with tariff order dated 21-3- 2018. As per Service code-996912, it is exempted 2. Delayed Payment Surcharge Rate Schedule: General Conditions of Supply annexed with tariff order dated 21-3-2018 NA 3. Checking and testing of meters Schedule of Miscellaneous charges as annexed with tariff order dated 21-3- 2018 Taxable @ 18% in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oads) Regulations, 2013. Exempted Service code-996912 14. Security deposits at the time of release of new LT connection and for enhancement in sanctioned load. UERC (Release of New LT Connections, Enhancement and Reduction of Loads) Regulations, 2013. NA 15. Recovery of cost of burnt meter from the Consumer Regulation 3.1.5 of UERC (Release of New LT Connections, Enhancement and Reduction of Loads) Regulations, 2013. Taxable @ 12% in 'terms of HSN 9028 (Schedule-II) 16. Registration-cum-processing fee. Regulation-4(2) of the UERC (Release of new HT EHT Connections, Enhancement and Reduction of Loads) Regulations, 2008. Taxable @ 18% in terms of Circular 34/8/2018-GST, dated 1-3-2018 17. Works charges for release of new HT/EHT connection and for enhancement/ reduction in sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant we find that the applicant is registered in Uttarakhand with GSTIN bearing No. 05AAAC17135F1ZW and are engaged in supply/ distribution of electrical energy. During the course of said activity they are require to undertake certain activities like creation of infrastructure for distribution, installation and checking of energy meters/ capacitors etc. For that they collected charges from the customers which are pre-decided by UERC and not by them. The applicant has submitted that Electric Energy is classified under HSN 2716 00 00 which attract GST at nil rate. Further transmission or distribution of electricity by an electricity transmission or distribution utility is exempted vide Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017. But vide Circular 34/8/2018-GST, dated 1-3-2018 certain services rendered during supply/ distribution of electricity to the customers made taxable. 7.2 On going through the documents we find that it is an undisputed fact that the party is engaged in transmission or distribution of electricity and the same shall be treated as supply of service. The applicant claimed that said supply of service is exempted from GST in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in Annexures A B of the application, I find that the Government has issued a Circular 34/8/2018-GST, dated 1-3-2018 on this matter and the relevant portion of the same is reproduced below : Circular 34/8/2018-GST, dated 1-3-2018 S. No. Issue Clarification 4 (1) Whether the activities carried by DISCOMS against recovery of charges from consumers under State Electricity Act are ex- empt from GST? (1) Service by way of transmission or distribution of electricity by an electricity transmission or distribution utility is exempt from GST under Notification No. 12/2017-C.T. (R), Sl. No. 25. The other services such as, - (i) Application fee for releasing connection of electricity; (ii) Rental Charges against metering equipment; (iii)Testing fee for meters/transformers, capacitors etc.; (iv) Labour charges from customers for shifting of meters or shifting of service lined) (v) charges for duplicate bill; provided by DISCOMS to consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined in the following manner, namely :- (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. In the instant case transmission or distribution of electricity and service rendered during the course of said service is covered under composite service and transmission or distribution of electricity constitutes the predominant element and therefore becomes the principal supply and other services as mentioned in Annexures A B of the application shall form the part of that composite supply as ancillary inasmuch as distribution of electricity, energy cannot be effectively accomplished without installation of infrastructures such as substations, transmission towers and installation of meters to record electricity consumption for periodic billing and recovery of charges etc. On true and fair analysis of the aforesaid Notification, the conclusion is compelling that all services provided in relation to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to interpretation of similar exemption Notification No. 11/2010-S.T., dated 27-2-2010 which is pari materia to the Notification No. 45/2010-S.T., dated 20-7-2010. In view of the discussion above, we do not find any merit in the appeal of the Department which is accordingly dismissed. The appeals filed by the assessee are allowed and the demand confirmed by the impugned order is set aside. RULING 8. In view of the above, we hold that the following services provided by UPCL, Dehradun are exempted from GST : (1) Charges for distribution and supply of electricity such as fixed charge, demand charge, energy charge, fuel charge adjustment, excess load demand charge, low power factor surcharge, low voltage surcharge/high voltage rebate, wheeling charge, cross subsidy surcharge and additional surcharge etc.; (2) Delayed payment surcharge; (3) Assessment against theft and unauthorized use of electricity; (4) Security deposits at the time of release of new LT connection and for enhancement in sanctioned load; (5) Security deposits at the time of release of new HT/EHT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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