9911796707
TMI Blog2024 (7) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement in the form of attachment. 3. The applicant submitted the issue in brief as under:- A. The Uttar Pradesh Power Transmission Corporation Limited (hereinafter referred to as "Applicant") was incorporated under the Companies Act, 1956 in the year 2006. UPPTCL has been entrusted with the business of transmission of electrical energy to various licensees within the State of Uttar Pradesh. Further, Government of Uttar Pradesh, in exercise of powers vested under Section 30 of The Electricity Act, 2003 vide notification No. 122/U.N.N.P/24-07 dated July, 18,2007 notified UPPTCL as the state transmission utility of Uttar Pradesh. B. Further, UP Power Transmission Corporation Limited, has been incorporated with the main objective to acquire, establish, construct, take over, erect, lay, operate, run, manage, hire, lease, buy, sell, maintain, enlarge, alter, renovate, modernize, work and use electrical transmission lines and/or network through extra high voltage, high voltage and associated sub-stations, cables, wires, connected with transmission ancillary services, telecommunication and telemetering equipment in the State of Uttar Pradesh. 4. The applicant has sought advance rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including GST is recovered from the consumer. C. That the applicant being an electricity transmission company has an expertise in the area of installation/supervision of electricity lines. D. That whenever new electricity lines are to be installed or these lines are to be modified at the requirement of the customer, it is done at the cost of customer. In other words, the entire cost is ultimately born by the customers. It is known as 'Deposit work' E. That the applicant is required to build, maintain and operate the electricity distribution/transmission system. The system so developed is accounted for as fixed assets in the books of account of the applicant. That the UPPTCL is exclusive liable and responsible for modification/alteration/extension of the transmission infrastructure. It is for this reason that deposit work is to be executed under the supervision of the UPPTCL only. F. That in light of above facts, applicant's filed an application for advance ruling on following issue: - a. Whether in the given fact and circumstances, value of material and cost of execution work for installation of lines will be included in the value of supply for determination o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to comply with the ES Code and it is for this reason that the deposit work is to be mandatorily executed under the supervision of the UPPTCL. Now, provisions regarding valuation under the CGST Act and Central Goods and Services Tax Rules, 2017 (CGST Rules) are relevant in order to determine the consideration for the instant supply. D. As per Section 15 (1) of the CGST Act, value of supply shall be the transaction value, i.e., price actually paid or payable for the said supply, where the supplier and the recipient are not related, and price is the sole consideration. In the said mode of execution of deposit works, price is not the sole consideration, as the handover of infrastructure so created under deposit work by the consumer to the UPPTCL is the non-monetary consideration to the applicant. Since benefit thereof accrues to applicant. Thus, Section 15 (1) shall not apply. E. Section 15(4) provides that where the value of supply of goods or services or both cannot be determined under Section 15 (1), the same shall be determined, as may be prescribed. Rule 27 to 31 of the CGST Rules prescribe for determination of value of a supply. F. Rule 27 provides for valuation mechanism i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration would be the total cost incurred by the consumer, in executing the deposit works. Thus, total consideration in this mode of carrying out the deposit work would be total cost of executing the deposit work + supervision charges + shutdown charges, H. Currently the applicant is computing GST on the sum of (a) total expenditure incurred by consumer on the intended work, (b) supervision charges and (c) shutdown charges In our view, this is in accordance with provisions of Section 15 of the CGST Act and the Rules made there under. I. However, the applicant would like to mention the AAAR in case of M/s Purvanchal Vidyut Vitran Nigam Limited vide Order No 09/AAAR/16/08/2023 dated 16.08.2023 wherein the appellate authority confirmed the impugned Ruling UP ADRG-23/2023 dated 21.04.2023 passed by the Authority for Advance Ruling against the Appellant except the provision of GST invoice as held in Para 19 of the Ruling.(i.e where the value of materials and cost of execution of work for installation of electric lines are borne by the recipient of service and the appellant charges supervision fee only, the value of materials and cost of installation shall not be included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that deposit work is to be executed under the supervision of the UPPTCL only. 15. The deposit works is carried out at the behest of the consumer via two modes:- I. First, where entire works with material are arranged by customer and the installation work is done by contractor hired by the customers. The applicant's role is to supervise the work, for which they charge 15% towards their fee. Entire cost is incurred by the UPPTCL and such cost including applicable GST is recovered from the consumer. As per the current practice, the UPPTCL is computing GST on the total estimate of expenditure. II. In the second method, entire material and installation work is arranged by the applicant and work is carried out by the vendors under the supervision of the applicant and such cost including GST is recovered from the consumer. 16. Here the applicant has sought Advance ruling only for first method where entire works with material are arranged by customer and the installation work is done by contractor hired by the customers. The applicant's role is to supervise the work, for which they charge 15% towards their fee. 17. We have gone through the submissions made by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices supplied in the course of construction/ dislocation/shifting are neither supplied by nor the consideration for the same has been received by UPPTCL hence there is no supply of works contract services by the UPPTCL. v. In this case the ownership of the property being dislocated / shifted is vested with UPPTCL, the UPPTCL receives money in the form of dislocation / shutting charges. The services supplied in such cases is related to an act of tolerance with respect to such immovable property and hence covered under "agreeing the obligation to refrain from an act, or to tolerate an act or a situation , or to do an act" and are classified under SAC 999794. vi. The work contract services in the present case is being supplied by an independent contractor and is covered under SAC 9954, it is distinct service which is being supplied by a registered person other than UPPTCL. vii. Though the property subjected to works contract services belongs to the UPPTCL but the supply of works contract services is not made on behest of UPPTCL. The contract for works contract services is executed between the concerned party and a third party works contractor and hence UPPTCL is a stranger to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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