2024 (3) TMI 257

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....nding provisions of the KSGST Act, Rules and the Notifications issued there under. 3. The applicant requested advance ruling on the following: 3.1. Whether GST is payable on the electricity produced from solar panels installed by the applicant when sold to customers? 3.2. Whether KSEB is liable to levy GST on wheeling charges, transmission and distribution charges and carrying charges that will be billed to the applicant by it against providing the infrastructure of KSEB for delivering the electricity produced by the applicant to its sellers? 4. Contentions of the Applicant: 4.1. The applicant submits that the company is planning to install solar power panels and produce and supply electrical energy [electricity] to institutional customers. The electricity so produced from solar panels is proposed to be distributed through the transmission lines of Kerala State Electricity Board (KSEB) to the customers. The applicant is in the process of obtaining necessary license from KSEB to commence the above activities. For the utilization of transmission lines, KSEB will be collecting various charges such as transmission charges, wheeling charges and carrying cost. Wheeling charge is the....

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....the expression "transmission" shall be construed accordingly. As per Section 2(19) of the Electricity Act 2003, "Distribution system" means the system of wires and associated facilities between the delivery points on the transmission lines or the generating station connection and the point of connection to the installation of the consumers. As per Section 2(67) of the Electricity Act 2003, "State Transmission Utility" means the Board or the Government Company specified as such by the State Government under sub-section (1) of section 39. After the enactment of Electricity Act, 2003, KSEB has been functioning as the State Transmission Utility (STU) and a distribution licensee under section 172(a) of the said Act. 4.5. The applicant sources the input services of KSEB for delivering electricity to the customers for which transmission and distribution charges apart from wheeling and other charges are paid to KSEB. Thus the supply of services is being carried out by KSEB. Since the applicant is not engaged in the services of supplying electricity to the end customers, there is no supply of services by the applicant in this scenario. The distribution services involved in the supply of ....

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....o the applicant for the distribution of electricity, so produced, through their transmission assets. 7.2. At the outset it has to be examined whether the questions on which advance ruling is sought are admissible as per the provisions of the CGST Act 2017 governing advance ruling. 7.3. Section 95(a) of CGST Act defines 'advance ruling' as follows:- (a) "advance ruling" means a decision provided by the Authority or the Appellate Authority or the National Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or subsection (1) of section 100 or of section 101C, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 7.4. From the above definition it is evident that an applicant can seek an advance ruling in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. 7.5. Section 97 of the CGST / SGST Act specifies the subjects on which an application for advance ruling can be made. Section 97 of the CGST/ SGST Act reads as follows:- (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an ....

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....by Kerala State Electricity Board to the applicant and hence the applicant is the recipient of the services in the transaction. Therefore, the question do not pertain to a transaction that is being undertaken or proposed to be undertaken by the applicant and hence do not fall within the purview of the definition of advance ruling. Further, it is categorically stated in Section 103 of the CGST Act that the ruling pronounced is binding only on the applicant and the jurisdictional authority of the applicant. Hence, if a recipient obtains a ruling on the taxability of his inward supply of goods or services or both the supplier of such goods or services and their jurisdictional authority is not bound by that ruling and the supplier and their jurisdictional authority is free to assess the supply according to their own determination and the ruling has no relevance or applicability. Therefore, the question is not admissible. 7.9. The first question on which advance ruling is sought by the applicant falls within the purview of clauses (b) and (e) of sub-section (2) of Section 97 of the CGST Act, 2017; i.e; applicability of a notification issued under the Act and determination of the liabil....