TaxTMI 
TaxTMI 
2019 (12) TMI 1574
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..../GST/2019, Dated 08.07.2019. As per sub section 2 of section 100 of APGST Act 2017/CGST Act 201, the appeal shall be filed within a period of 30 days from the date on which the ruling sought to be appealed against is communicated to the applicant. But it is observed that the appellant had filed the application on 16.9.2019 with a delay of 23 days from the date of receipt of the ruling. They cited the technical glitches in the state GST portal and delay in administrative approvals at their end as reasons for their failure to file the appeal online within the time limit and requested for the condonation of delay. The appeal is considered and the delay is condoned by this authority in exercise of the powers contained in proviso to subsection 2 of Section 100 of the Central Goods and Services Tax Act 2017 and the Andhra Pradesh Goods and Services Tax Act 2017, and the appeal is admitted. 1. Brief History of the Case: The APSPDCL is a distribution licensee under Section 2 (17) of the Electricity Act, 2003. The main activity of the appellant is supply of electricity and for this purpose engages in other ancillary activities in connection and in relation to supply of electricity. So....
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....ks are liable to 12% GST since they are executed for the purpose of non-commercial? f. Whether the supply of services and goods made by the petitioner through contractors by way of construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network up to the tube well of the farmer or agriculturist for agricultural are exempted vide Notification No.14/2018- Central Tax (Rate) dated 26.07.2018? The Authority for Advance Ruling had ruled that Answers to questions (a); (b) & (c) In the facts and circumstances presented by the applicant the "Transmission or distribution of electricity by an electricity transmission or distribution utility" is only exempted vide entry no. 25 of the Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017. Any service, other than transmission or distribution of electricity, rendered by the applicant is not covered in the said entry for claiming exemption. Services rendered apart from "transmission or distribution of electricity" are taxable. Answers to the questions (d) & (e): The activities referred by the applicant are not covered in the Notification No.24....
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....er Development and Reforms Program supplies made through contractors are liable to 12% GST since they are executed under grants provided by central government and no commercial activity is involved with regard to these works. (f) Orders be passed to the effect that the execution of the Agricultural Demand Side Management Scheme (AGL) works are liable to 12% GST since they are executed for non-commercial purposes. (g) Orders be issued that the supply of services and goods made by the appellant through contractors by way of construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network up to the tube well of the farmer or agriculturist for agricultural are exempted vide Notification No.14/2018- Central Tax (Rate) dated 26.07.2018. (h) Please to pass any pass such further orders in the interest of justice. 2. Grounds of appeal: The Appellant submits the following contentions: 1) The order of the Hon'ble Advance Ruling Authority is not a speaking order and passed with a revenue bias. The details of activities undertaken by the APSPDCL ought to have been discussed by the Authority in its ord....
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.... Ltd., The said decision has not been stayed by the Hon'ble Supreme Court and the Advance Ruling Authority, being a quasi-judicial authority is duty bound to follow the same; 5) Instead of following the Hon'ble Gujarat High Court's order, the Advance Ruling Authority discussed about the merits of the decision taken by the Hon'ble High Court. Further, the decision of the Hon'ble High Court was not even admitted on the date of order of Advance Ruling i.e., 08.07.2019. The petition filed by the department was admitted only on 09.08.2019 in SCA(Civil) Diary No 24733/2019. 6) In para 7.3 (g) of the impugned order dt 08.07.2019, the authority held that the circular dt.07.12.2010 is not applicable after the introduction of GST. This is contrary to the finding at para 29 of the Hon'ble High Court's order, wherein the Hon'ble High Court has summarized that: - As per the circular dated 7th December, 2010, the reason for saying that supply of electricity meters for hire to consumers is covered by the exemption notification is that such service is an essential activity having direct and close nexus with transmission and distribution of electricity....
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....le service which gives such bundle its essential character is exempt from tax, the entire bundle will have to be treated as provision of such single service. - In respect of the period falling under the negative list regime, the services in question would fall within the ambit of bundled services as contemplated under sub-section (3) of section 66F of the Act, and would have to be treated in the same manner as the service which gives the bundle its essential character, namely, transmission and distribution of electricity and, would therefore, be exempt from payment of service tax. - The services provided by the petitioner are in the nature of composite supply and therefore, in view of the provisions of clause (a) of section 8 of the CGST Act, the tax liability thereof has to be determined by treating such composite same as a supply of the principal supply of transmission and distribution of electricity. Consequently, if the principal supply of transmission and distribution of electricity is exempt from levy of service tax, the tax liability of the related services shall be determined accordingly. 9) The Advance Ruling Authority did not examine the alterna....
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....dertakes all supplies such as construction of sub-stations, laying of cables etc., through sub-contractors. If the exemption provided to supply of electricity and its ancillary activities provided through the contractors to the ultimate consumers is not extended to the services as envisaged by the Governments, the policy of non-taxing the electricity gets defeated as held in the above cases. 3. Personal Hearing The Personal Hearing was called on 19th November 2019, for which the authorized representative Sri Y. Srinivasa Reddy, Advocate attended and reiterated the written submission. The appellant made additional submissions at the time of Personal Hearing as under. Additional Submission 1. The appellant contended that a detailed worksheet with details of all supplies and revenues against these supplies had been submitted to the AAR and asked whether each of them or any of them are exempted from GST. However, the Hon'ble AAR had issued the subject ruling without making any discussion on each one of the supplies for which the ruling is sought but by only picking up of only supply of service of testing of meters and holding that it is not an incidental supply to th....
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....of supply) issued by the Electricity Regulatory Commission. Thus, there is no supply of any goods or services to the consumers except supply of electricity as the property in the goods is not transferred to the consumers and the amounts are collected only for facilitating supply of electricity. Even in the balance sheet of the appellant company, the value of these goods for which monies are collected from the consumers is shown in the depreciation account. In this context, the appellant refers to the ruling of the ARA in the case of National Highways Authority of India reported in 2019 (27) GSTL 155 (AAR-GST). 5. The appellant claimed that the department was proposing demand of GST on the services basing on the circular dt.1.3.2018 wherein it was clarified that supply of electricity is exempted but the ancillary activities are taxable. The said circular is held as ultra vires and struck down by Hon'ble High Court. Even if it is valid, as an appeal is filed against the order of HC, the demand could be raised only from 1.3.2018 since an oppressive circular can have only retrospective effect as held in the case of Suchitra Components Ltd vs. UOI filed herewith notwithstanding t....
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....he appellant as enlisted in the application are taxable or not. In this regard it is pertinent to make a reference to the clarificatory circular issued with regard to the following services as approved by the Fitment Committee to the GST Council in its meeting held on 9th, 10th and 13th January 2018 as under Circular No. 34/8/2018-GST F. No. 354/17/2018-TRU Subject: Clarifications regarding GST in respect of certain services S.No. Issue Clarification 4 (1) Whether the activities carried by DISCOMS against recovery of charges from consumers under State Electricity Act are exempt from GST? (1) Service by way of transmission or distribution of electricity by an electricity transmission or distribution utility is exempt from GST under Notification No. 12/2017- CT (R), SI. No. 25. The other services such as, - i. Application fee for releasing connection of electricity; ii. Rental Charges against metering equipment; iii. Testing fee for meters/transformers, capacitors etc.; iv. Labour charges from customers for shifting of meters or shifting of service lines; v. charges for duplicate bill; provided by DISCOMS to c....
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.... works. 2) Whether the execution of the Agricultural Demand Side Management Scheme (AGL) works are liable to 12% GST since they are executed for non-commercial purposes. In this context, the appellant contends that the AAR had not examined their alternative plea with regard to availment of concessional rate sought for their above mentioned programs under Notification No.11/2017 - Central Tax (Rate) dt. 28.06.2017 read with Notification No. 31/2017-Central Tax (Rate) dt. 13.10.2017. When we examine the above issue, it is clear that it is a settled issue between the appellant and the lower authority that APSPDCL is a Government entity vide Notification No.31/2017 Central Tax (Rate) dt. 13.10.2017. But the issue to be determined is whether the concessional rate of tax is applicable to the appellant. The Government of India vide Notification No.11/2017-Central Tax (Rate) dt.28.06.2017 notified the rate of GST applicability on supply of services. Under this notification for Heading 9954 the applicable rate of GST is 18% (CGST - 9% & SGST - 9%); the said notification has been amended from time to time and Notification No. 24/2017-Central Tax (Rate) dt.21.09.2017, inserted Entry ....