The deposit work undertaken by the applicant and 6% supervision ...

Electricity Transmission Services Taxed at 9%; No GST Exemption, ITC Allowed With Reversal for Business Use.

July 18, 2024

Case Laws     GST     AAR

The deposit work undertaken by the applicant and 6% supervision charges received for supervision and monitoring of deposit work related to transmission or distribution of electricity do not qualify for exemption under Entry 25 of N/N. 12/2017-CT (R) dated 28.06.2027 issued under GST Laws, as they are ancillary/incidental to the principal supply of transmission or distribution of electricity. The applicant is entitled to ITC of GST paid to contractors on execution of said work and GST paid on materials and equipment supplied free of cost out of its stock, as it is used for furtherance of business. However, reversal of ITC is required u/s 17(2) of CGST Act read with Rule 42 and 43 of CGST Rules. The deposit contribution works (support services) undertaken by the applicant are taxable supplies at 9% rate under SAC-998631, as per Entry SI No. 25 of Notification No. 11/2017-CT dated 28.06.2017.

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