TMI Blog2024 (3) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... hether KSEB is liable to levy GST on wheeling charges, transmission and distribution charges and carrying charges that will be billed to the applicant by it against providing the infrastructure of KSEB for delivering the electricity produced by the applicant to its sellers? - HELD THAT:- The applicant has sought the taxability of the services provided by Kerala State Electricity Board to the applicant and hence the applicant is the recipient of the services in the transaction. Therefore, the question do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Further, it is categorically stated in Section 103 of the CGST Act that the ruling pronounced is binding only on the applicant and the jurisdictional authority of the applicant. Hence, if a recipient obtains a ruling on the taxability of his inward supply of goods or services or both the supplier of such goods or services and their jurisdictional authority is not bound by that ruling and the supplier and their jurisdictional authority is free to assess the supply according to their own determination and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribution charges, etc. 4.2. The price at which the electricity is proposed to be sold to the prospective consumers in the market is at a lesser unit rate than the rate offered by KSEB, with a view to making the same commercially more attractive to the consumers. The applicant is in the process of negotiating the contract terms of distribution with the KSEB and finalization of its procurement contracts with the suppliers. The applicant is of the understanding that the electricity generated from solar panels is exempted from the Goods and Services Tax. The applicant further submits that as per serial No. 25 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 transmission or distribution of electricity under Heading 9969 by an electricity transmission or distribution utility is an exempted service. 4.3. The applicant submits that electricity is defined in Section 2(23) of the Electricity Act 2003 as follows; electricity means electrical energy- (a) generated, transmitted, supplied or traded for any purpose; or (b) used for any purpose except the transmission of a message. Therefore, the words, 'electricity' and 'electrical energy' convey the same meaning. The activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of their facilities for which the wheeling and other charges are also levied. Wheeling charge is for using their transmission assets for distributing electricity. Whatever charges may be levied by KSEB in connection with the distribution of electricity to the ultimate customers, the predominant supply is the distribution services along with some other ancillary services making the entire bundle of services as a composite supply. The services of transmission or distribution of electricity by an electricity transmission or distribution utility classified under SAC 9969 is exempt from GST as per Serial No. 25 of Notification No. 12/2017-CT (Rate) dated 28.06.2017. When the predominant element in the composite supply is transmission and distribution of electricity, which is exempt, then all other charges levied by KSEB on the applicant is also exempt from GST as per section 8 of the CGST/KSGST Act 2017. Hence GST is not leviable on the amount billed by KSEB to the applicant against the services provided in connection with the distribution of electricity to the customers. 5. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 7.6. Section 103 of the CGST Act governs the applicability of Advance ruling wherein it is specified that; (1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only,- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. (2) The advance ruling referred to in sub-section (1) shall be binding unless the law, facts or circumstances supporting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customers for commercial purposes at favorable rate. The supply of electricity to the selected institutional customers is stated to be purely on the basis of mutual agreement. The supply of electricity includes, generating electricity from a source like solar panels or hydro-electric stations or thermal power stations and then transmitting the generated electricity to the end customers through transmission lines. Also it is necessary to power up the electricity, transmitted through lines, at intermediate points by transformers. In the instant case, the applicant has only installed solar panels for generating electricity and they do not provide any connected infrastructure such as transmission lines and transformers for carrying and power up the electricity from the generating point to the utilization point. The installation of transmission lines and connected infrastructure requires huge investment and hence the company approached the Kerala State Electricity Board for transmitting electricity to customers through their transmission assets. 7.11. Now, the issue to be decided is whether the supply of electricity generated by the applicant from the solar panels installed by them is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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