taxability of services rendered to transmissions Company

[sv bhasker]

Sir

My client renders man power supply and construction service to Transmission companies. I am of the view that the said services are exempted under 11/2010-ST and 45/2010-ST.

I request you to inform whether I am correct.

[Mahir S]

Yes, you are absolutely correct, both the above said notification exempts the taxable service provided to any person, by any other person for transmission of electricity, from the whole of service tax leviable thereon under section 66 of the said Finance Act.

Further, the same also falls under the Negative List under the heading - Transmission or distribution of electricity.

However, it would be advisable to study the definition of the term Transmission companies.

Clarification by the  :-

(Circular  No. D. O. F. No 334/1/2012-TRU Dated: - March 16, 2012)

4.11.1 What is the meaning of electricity transmission or distribution utility?

     An ‘electricity transmission or distribution utility’ has also been defined in section 65B of the act. It includes the following –

• the Central Electricity Authority
• a State Electricity Board
• the Central Transmission Utility (CTU)
• a State Transmission Utility (STU) notified under the Electricity Act, 2003 (36 of 2003)
• a distribution or transmission licensee licensed under the said Act
• any other entity entrusted with such function by the Central or State Government.

 

[sv bhasker]

Thank you Mr Naveed for quick reply.

AI Summary

Exemption for transmission or distribution of electricity: services to qualifying utilities are outside service tax levy. Manpower supply and construction services provided for the transmission or distribution of electricity are exempt from service tax under the cited notifications and are covered by the negative list. The exemption applies when the recipient qualifies as an electricity transmission or distribution utility, including the Central Electricity Authority, State Electricity Boards, CTU, notified STUs, licensed distribution or transmission licensees, or any entity entrusted with such functions by the Central or State Government.