AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 977
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....of Notification No. 12/2017-CT (R) dated. 28.06.2027 issued under GST Laws. Alternatively, whether the same is ancillary / incidental to the principal supply of transmission or distribution of electricity and form part of composite supply of services involving more than one supply as contemplated under Section 2 (30) of the CGST /OGST Acts 2017 and by virtue of provisions of Section 8 (a) of the CGST/OGST Acts 2017 has to be treated as a supply of the principal supply, namely, transmission and distribution of electricity and exempted or nil rated? (b) If it is held that, the consumer deposit work and 6% supervision charges received by the Applicant under situation 1 & 2 is taxable and liable to GST, whether the Applicant is eligible for ITC of GST paid to contractors on execution of said work and GST paid on materials and equipment supplied free of cost out of its stock which is centrally procured earlier of procuring project specific from third party vendor / supplier? (c) If it is held that the Applicant is eligible for ITC, whether any part of such input tax credit is required to be reversed under section 17 (2) of CGST Act read with Rule 42 and 43 of CGST Rules? 1.1 At the....
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....ith the Applicant prior to commencement of the work. The 'work is outsourced by TPCODL through its purchase order to contractor who provide services and carry out installation and erection of electrical infrastructure and the materials, equipments are supplied by the Applicant free of cost either from its pool of materials/equipments stock which is centrally procured earlier or procuring project specific materials/equipments from third party vendor/supplier. Further, in both the situations, the consumer deposits 6% of the estimated cost of the deposit work plus GST as supervision charges for supervision and monitoring of execution of the deposit work. In both the cases GST is paid to the contractor for services provided and also on materials procured by the Applicant which is deposited by Applicant in compliance to GST law. 2.4 On completion of deposit works the exclusive right to operate, manage and maintenance of such electrical infrastructures shall rest with the Applicant and is used for transmission or distribution of electricity. In case of deposit work related to overhead lines shifting, the electrical line belongs to TPCODL are shifted as per request of consumer by usi....
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....y, then such services would form part of composite supply of services by the Applicant involving more than one supply as contemplated under section 2 (30) of the CGST/SGST Acts and, would, therefore by virtue of provisions of Section 8 (a) of the CGST Act, have to be treated as ancillary/incidental supply to the principal supply, namely, transmission and distribution of electricity and taxed accordingly. 2.8 Hon'ble High Court of Gujarat, in its Judgment dated 19th December, 2018, in the case of M/s. Torrent Power Ltd. v. Union of India [2020 (34) G.S.T.L. 385 (Guj.)], has already clarified that "The Meaning of "Transmission and distribution of electricity" does not change either for the negative list regime or the GST regime. Accordingly, the services which stood included within the ambit of transmission and distribution of electricity during the pre-negative list regime cannot now be sought be excluded by merely issuing a clarificatory circular, that too, with retrospective effect". Observing this, Hon'ble High Court has struck down paragraph 4 (1) of the Circular No. 34/8/2018-GST, dated 1-3-2018 as being ultra vires the provisions of Section 8 of the CGST Act, 2017 as ....
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....tten submission of the Applicant). The Applicant, through its representative Mr Niranjan Swain, Advocate appeared for personal hearing. Mr Swain re-iterated the submissions already furnished in the application filed for advance ruling, further, during PH, Mr Swain also submitted a fresh written submission, wherein, tire Applicant in support of its submission has relied upon different Judgments including Judgment of Hon'ble High Court of Gujarat in the case of M/s. Torrent Power Ltd. v. Union of India [2020 (34) G.S.T.L. 385 (Guj.)] / [2019] 101 taxmann.com 303 (Gujarat) which was followed by the Rajasthan High Court in case of Jodhpur Vidyut Vitran Nigam Ltd. 2022 (56) G.S.T.L. 273 (Raj.) and a Division Bench of the Tribunal in M.P. Poorva Kshetra Vidyut Vitran Co. Ltd. 2022 (67) G.S.T.L. 86 (Tri. -Del.) and requested to decide the issue accordingly. The Revenue has neither submitted its comments nor appeared for personal hearing. 3.1 Consequent upon appointment of New SGST Member vide Government of Odisha Notification No. 9739-FIN-CTI-TAX-0072/2017 dated 06.04.2024 communicated under Letter C.No. CCT-PEI-POL-0079-2021/5015/CT&GST dated 10.04.2024, a fresh personal hearing was....
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....treated as a supply of the principal supply, namely, transmission and distribution of electricity and exempted or nil rated? (b) If it is held that, the consumer deposit work and 6% supervision charges received by the Applicant under situation 1 & 2 is taxable and liable to GST, whether the Applicant is eligible for ITC of GST paid to contractors on execution of said work and GST paid on materials and equipment supplied free of cost out of its stock which is centrally procured earlier or procuring project specific from third party vendor / supplier? (c) If it is held that the Applicant is eligible for ITC, whether any part of such input tax credit is required to be reversed under section 17 (2) of CGST Act read with Rule 42 and 43 of CGST Rules? 4.2 The issue was examined in detail. It is observed that the Applicant in addition to the principal activity of providing services of Transmission and distribution of electricity is also providing services in the form of Deposit Works to various consumers. As per the submission made to the application, the Applicant prepares estimated cost of the electrical infrastructures/electrical plant such as installations of bay, substations, un....
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....y' in terms of section 7 of GST Act, 2017. 4.4 The Applicant relies on the following entry, while contending his activities as part of the principal supply of "transmission or distribution of electricity", which reads as under The entry no. 25 of the Notification, New Delhi, the 28th June, 2017 reads as No 12/2017-Central Tax (Rate) follows: 25 Heading 9969 Transmission or distribution of electricity by an electricity transmission or distribution utility. Nil Nil 4.5 It is not disputed that the Applicant's main activity of 'transmission or distribution of electricity" is rated 'nil' as per the above entry. But the issue to be decided is whether the activities of the Applicant as enlisted in the application are taxable or not. In this regard it is pertinent lo 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 dated 1st March 2018 Subject: Clarifications regarding GST in respect of certain services S.No. Issue Clarification 4 (1) Whether....
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....th supply of electricity; rather they are executed by/supplied by and charged for by the Applicant only if demanded or consumed by the customers. Further, the amount is recovered from the consumers as non-tariff charge. This shows that the services of transmission of electricity is independent of the deposit contribution works under taken by the Applicant and accordingly do not fulfill all conditions specified in section 2 (30) of the CGST/OGST Act for the purpose of treating both the supplies as composite supply. Thus, the exemption notified for 'transmission and distribution of electricity' cannot be extended to the deposit contribution works (support services) undertaken by the applicant on the pretext of those being a part of the composite supply, which is far from true. Rather those support services in form of deposit contribution works provided by the applicant are taxable supplies irrespective of the fact that whether the same are supplied by contractors or third parties. Thus, the exemption is limited to "Transmission and distribution' of electricity only. 4.7.1 The deposit works undertaken by the Applicant is supplying support services to electricity transmiss....