AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 598
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....ntral Goods and Service Tax 2017 and since the said service is exempted from GST under Sr. No.25 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 and Notification No. 12/2017-State Tax (Rate) dated 30th June 2017, the same are not liable to GST." 2.1. The Applicant, vide Annexure 'B' &'C' sheet to their application dated 08.02.2018, has submitted the Statement of Facts, which are as follows: A. STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTIONS ON WHICH THE ADVANCE RULING IS REQUIRED; i). The Applicant is a Company incorporated under the Companies Act, 1956, which was promoted by the erstwhile Gujarat Electricity Board and is also holder of Registration certificate bearing No. 24AABCG4029R2ZC. ii). In exercise of powers conferred under Section 39(1) of the Electricity Act, 2003, the Gujarat Government, by Notification No.GHU-2004-31-GEB-l 1042946-K dated 29th May 2004, notified the Applicant (GETCO) as "State Transmission Utility (STU)" with effect from 1st June 2004. Accordingly, the Applicant is a "State Transmission Utility (STU)", as defined under Section 2(67) of the Electricity Act, 2003 read with Section 39(1) of the said ....
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....tions, Overhead Lines and Cables so constructed/erected vest in the Applicant and are the property/assets of the Applicant. ix). Operation and maintenance charges are also recovered from the consumer for maintaining and operating of constructed assets of GETCO as per the Gujarat Electricity Regulatory Commission's Regulations. x). The Supply of Service of "Transmission of Electricity" by State Transmission Utility is exempted from the levy of Central GST vide Sr. No.25 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 as well as from the levy of Gujarat State GST vide Sr. No.25 of Notification No. 12/2017-State Tax (Rate) dated 30th June 2017. B. Statement Containing the Applicant's interpretation of Law or Facts as the case may be in respect of the Questions on which Advance Ruling is required: i). The Applicant, who is a State Transmission Utility within the meaning of Section 2(67) of the Electricity Act 2003 read with Section 39(1) of the said Act, supplies the Service of "Transmission of Electricity". ii). For the supply of the service of "Transmission of Electricity" under "nondiscriminatory open access" to consumers, const....
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....ate) dated 30th June, 2017. Thus, the entire value of the supply of service of "Transmission of Electricity" by the Applicant which as submitted in para (iii) above will include the aforesaid cost of construction/erection in addition to the Transmission charges, is exempt from GST and accordingly no GST is payable on the said cost of construction/ erection recovered from the consumers to whom the supply of service of "Transmission of Electricity" is made by the Applicant. v. Except the supply of service of "Transmission of Electricity", no other supply of any goods or service is made by the Applicant to the consumer. As submitted herein above, the Bays/Sub-Stations, Overhead Lines and Cables which are constructed/erected for the purpose of supply of service of "Transmission of Electricity" vest in the Applicant and are the property/assets of the Applicant. Thus, there is no supply other than supply of service of "Transmission of Electricity" to the consumer and the supply of service of "Transmission of Electricity" is exempt from GST. vi). In the circumstances, no GST is payable by the Applicant. 3. Further, the Applicant, vide their letter Ref. No. GETCO....
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....e Estimate with the Applicant. After the completion of the construction/ erection work, the Deposit is adjusted against the actual cost of labour and material and supervision charge at 15% of such actual cost. (ix) Since as state above, though the cost of construction/ erection is borne by and recovered from the consumer, the Bays/ Sub-stations, Overhead Lines, etc so constructed/erected vest in the Applicant and are the property/assets of the Applicant. There is no question therefore of the Applicant having rendered any construction service to the consumers. What is constructed by the EPC contractors becomes the property of the Applicant and not of the consumer and hence there is no question of the Applicant having rendered any construction service to the consumer. (x) In terms of Section 15 (1) of the Central Goods and Services Tax Act 2017, the value of supply of a service shall be the transaction value, which is the price actually paid or payable for the supply of service when the supplier and recipient are not related and price is the sole consideration for the supply. Further, Section 15 (2) (b) of the said Act provides that the value of supply shall include....
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....ed in Section 2(30) of the Central Goods and Services Act 2017. Accordingly, as provided in Section 8(a) of the said Act, the same has to be treated as supply of the principal supply of "Transmission of Electricity" only which as submitted herein above is exempt from GST. DISCUSSION AND FINDINGS: 4. We have carefully gone through the application dated 08.02.2018 filed for advance ruling, written submission dated 12.04.2018 of the Applicant and the comments of the jurisdictional authority. 5. The applicant has sought for advance ruling for the following query: "Whether or not the cost of construction/ erection of Bays/ Sub-Stations, Overhead lines and Underground Cables and other charges including Pro-rata charges, supervision charges, proportionate line charges, registration fees and operation and maintenance charges, recovered by the Applicant from the consumers, forms part of the value of supply of service of "Transmission of Electricity" under Section 15 of the Central Goods and Service Tax Act, 2017 and since the said service is exempted from GST under Sr. No.25 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 and Notification No. 12/2017-State T....
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....vity to the grid for and on behalf of their consumers. As per the provisions of the Electricity Act, 2003 and GERC Regulations, the applicant recovers the actual cost of such construction/ erection along with applicable supervision charges from consumers 8. We find that the applicant is doing a facilitation work on behalf of its consumers for providing facilities of creating assets for and on behalf of their consumers to enable their consumers to obtain their desired electricity in relation to transmission of electricity. Here, the facilitation work done by the applicant for consumers is the construction/erection of "Bays/Sub-Stations, Overhead Lines, Underground cables, etc. or part thereof". Thus, the applicant constructs a dedicated transmission line to the point of connection to enable connectivity to the grid for and on behalf of their consumers. As per the provisions of the Electricity Act, 2003 and GERC Regulations, the applicant recovers the actual cost of such construction/ erection along with applicable supervision charges from consumers. Thus, the applicant has supplied the services by way of construction, erection, commissioning, or installation of infrastructure for....
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.... very pertinent to note that the said construction/erection of "Bays/Sub-Stations, Overhead Lines, Underground cables, etc. or part thereof" are optional services and one may or may not choose to avail these additional services. Hence, these services cannot be said to be naturally bundled and there is no composite supply. Each service is unique, different, not inter dependent on each other and is optional. Further, these construction services are to be provided prior to the supply of 'Transmission of electricity" and are not naturally bundled and supplied in conjunction with each other in the ordinary course of business. Therefore, it cannot be construed that the same is in conjunction with the supply of 'Transmission of electricity" and a "composite supply" as defined in Section 2(30) of the Central Goods and Services Act, 2017, which reads as under: (30) "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; ....
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....on and maintenance charges etc., towards expenses incurred in providing electric line or electrical plant or other facilities for the purpose of giving the supply of electricity. We find that as per regulation 3 of the Notification No.9 dated 31.03.2005 issued by Gujarat Electricity Regulatory Commission (GERC), every Distribution Licensee is allowed to recover from the applicant, requiring supply of electricity, any expenses that the Distribution Licensee shall be required to reasonably incurred to provide any electric line or electrical plant specifically for the purpose of giving such supply to the applicant. We further find that the "Distribution Licensee" as defined in regulation 2.1 (IV) of aforesaid notification, means a licensee authorized to operate and maintain a Distribution System for supplying electricity to the consumers in his area of supply. Further, we find that the mandate of GETCO is to provide transmission services for conveyance of electricity from the generating stations of GETCO and other generating stations and also interconnection points of Powergrid Corporation of India Ltd. and other Transmission Licensees to the interconnection points of the DISCOMS (Dis....