TaxTMI 
TaxTMI 
2019 (3) TMI 917
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.... RULING - RAJASTHAN. CONDONATION OF DELAY 3. The first issue relates to the issue of condonation of delay in filing appeal under Section 100(2) of the CGST Act. The Appellants has submitted that in the instant matter, the impugned advance ruling dated 11.5.2018 passed by the Learned Rajasthan Authority for Advance Ruling (hereinafter referred to as "Ld. AAR") was communicated to them on 25.05.2018. Accordingly, considering the time limit of 30 days for filing the appeal, appeal was to be filed by 24.6.2018. 4. The appellants has submitted that the GST is a new levy, they did not have a detailed understanding of the provisions of CGST Act. They became aware of the fact that the Appeal against the impugned advance ruling ought to have be filed within 30 days, only when the same was pointed out to it by the advocates. Thus, they were under a bona fide belief that the time limit for filing an appeal against impugned advance ruling passed by the Ld. AAR had not lapsed. 5. Further, the appellants has submitted that during the month of June 2018, Mr. Kailash Pati Mali, their Chief Finance Officer (CFO) was, inter alia, occupied in handling the queries and requirement of the Auditors f....
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....regulations made in this behalf by the Rajasthan Electricity Regulatory Commission ('RERC'). 17. The appellants filed an application for Advance Ruling in Form ARA-1 before the Authority for Advance Ruling, Rajasthan (AAR) for obtaining an Advance Ruling on the issue as to whether the various Non-tariff charges recovered by the appellants from its customers would be eligible for exemption under Sr. No. 25 of Notification No. 12/2017 - Central Tax (Rate). 18. The AAR, considered the application filed by the appellants and passed Advance Ruling No. RAJ/AAR/2018-19/02 dated 11.05.2018 = 2018 (6) TMI 1196 - AUTHORITY FOR ADVANCE RULING - RAJASTHAN and held as follows- i. In respect of the cheque dishonour fees, the AAR has held that the said fee is a consideration for 'tolerating an act', which is supply in terms of Clause 5(e) of Schedule II to CGST Act, and hence leviable to GST. ii. In respect of the Delayed payment charges, the AAR has held that the said charges are includible in the value of 'supply' under Section and hence taxable under GST. iii. In respect of other non-tariff charges, the Ld. AAR has relied on the Department Circular no. 34/8/2018-GST dated 1.3.2018 and hel....
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....yment charges collected by the appellants shall form part of the value of supply, such Delayed payment charges would only be an additional consideration for the main supply made by the appellants i.e. the supply of Electricity. A.7 Therefore, the appellants submit that since the main supply of Electricity is exempt from the payment of GST under Sr. No. 104 of Notification No. 2/2017-Central Tax (Rate) dated 28.6.2017, the Delayed payment charges forming part of value of such supply would also be exempted from payment of GST. A.8 Thus, the appellants are not required to pay GST on the delayed payment charges collected from the customer for delay made in making payment of consideration for supply of electricity. A.9 In view of the above, the impugned Advance Ruling dated 11.5.2018 is liable to be modified to the extent it pertains to Delayed payment charges. 21. The Cheque Dishonour fees collected by the appellants is not leviable to GST as the same is in nature of penal charges and not for any 'supply.' made by the appellants. B.1 As discussed above, section 15(1) of the CGST Act states that the value of 'supply' of goods or services would be the transaction value, which is the....
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....nt it pertains to Delayed payment charges. PERSONAL HEARING 22. Personal hearing was given to appellants on 9.10.2018. Shri Narendra Singhvi, Advocate appeared on behalf of Appellant for personal hearing. During the PH they reiterated the submission already made in the appeal memo. Upon being asked about the components of the fixed charge (as is being reflected in the electricity bills) and how these are arrived at, the Authorized representative of the appellant vide letter dated 15.10.2018 submitted that fixed cost is charged based on the 'Tariff for Supply of Electricity' issued by the Rajasthan Electricity Regulatory Commission (RERC), in terms of the provisions of the Electricity Act, 2003 and the RERC Tariff Regulations. Such orders specify the amount of fixed charges to be charged from consumers depending upon the consumption and category under which the consumer falls. Copy of one such Tariff Order is enclosed as Annexure-1 -The components of the Fixed Cost are the following: * Return on Equity * Interest on loans capital * Depreciation, including advance against depreciation * O&M Expenses * Interest on Working Capital Loan However, in arriving at the fixed cos....
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....subsidy. 25. From above, it is crystal clear that the value of supply shall include interest or late fee or penalty for delayed payment of any consideration for any supply. 26. Now the question which arises is what is the value of supply in the instant case. We find that the value of supply is the consideration charged by the appellants from the consumers of electricity on account of consumption of electricity by them. Coming to the taxability of the supply of electricity, we find that electrical energy has been classified under tariff item No. 27160000 under Customs Tariff Act, 1975 and value of its supply has been exempted vide entry No.104 of the notification No. 02/2017- Central Tax (Rate) dated 28.06.2017. As per Section 15(2) ibid, delayed payment charges should form part of the value of supply of electricity. When value of supply of electricity itself stands exempted by virtue of the above exemption notification dated 28.06.2017 incremental value (i.e. consideration for delalyed payment of the electricity bills as discussed above) would also remain exempted. Thus we do not endorse the ruling given by the AAR that GST is applicable on the delayed payment charges received by....