TaxTMI 
TaxTMI 
Electricity sale in inter unit
29 Apr 2014 
5 Replies 
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Cenvat credit: reversal required where electricity generated is cleared for sale rather than used for captive consumption.
Electricity is treated as goods (nil-rate) and not as a service, so service tax does not apply and VAT is often exempt. Where Cenvat credit has been availed on inputs, input services or capital goods used in generation, proportionate reversal of credit is required for electricity cleared for sale; credit is only available to the extent of captive consumption and not for excess electricity sold at contractual rates. (AI Summary)
Electricity is treated as goods (nil-rate) and not as a service, so service tax does not apply and VAT is often exempt. Where Cenvat credit has been availed on inputs, input services or capital goods used in generation, proportionate reversal of credit is required for electricity cleared for sale; credit is only available to the extent of captive consumption and not for excess electricity sold at contractual rates. (AI Summary)
Dear Experts, What is the legal obligation if we sale electricity to our inter unit or sister concer. Can we do it. Please advice excise and service tax point of view or any other legal obligation.Thanks