Page 169 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] IN RE : GUJARAT ENERGY TRANSMISSION CORPN. LTD. 271
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.
(xii) At the hearing, the Hon’ble Members referred to the fact that the
Applicant is recovering supervisions charges and whether that
could be said to be towards supply of service by the Applicant to
the consumer. As submitted hereinabove, what is constructed by
the EPC contractors becomes the property of the Applicant and not
of the consumer and therefore any supervision carried out by the
Applicant for such construction cannot be said to be supply of ser-
vice by the Applicant to the consumer. In any event, assuming
while denying that such supervision amounts to supply of a service,
the same is in conjunction with the principal supply of “Transmis-
sion of electricity” and therefore, is a composite supply as defined in
Section 2(30) of the Central Goods and Services [Tax] Act, 2017. Ac-
cordingly, 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 hereinabove is exempt from
GST.
Discussion and findings :
4. We have carefully gone through the application dated 8-2-2018 filed
for advance ruling, written submission dated 12-4-2018 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 in-
cluding 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 Tax (Rate),
dated 30th June, 2017, the same are not liable to GST?”
6. We find that the Applicant is a Government Company and is notified
as a ‘State Transmission Utility’ under Section 39(1) of the Electricity Act, 2003.
As a State Transmission Utility, it is the function of the Applicant under Section
39(2)(d) of the Electricity Act, 2003 to provide non-discriminatory open access to
its transmission system to any licensee or generating company on payment of the
transmission charges. However, an option is provided to the consumers to them-
selves arrange for having construction/erection of “Bays/Sub-Stations, Over-
head Lines, Underground cables, etc. or part thereof carried out”. Where the con-
sumers do not themselves arrange to have such construction/erection or part
thereof carried out, the Applicant gets the same carried out through EPC Con-
tractors for the consumers. Under the Gujarat Electricity Regulatory Commission
(Terms and Conditions of Intra-State Open Access) Regulations, 2011 (in short
GERC Regulations), the cost of such construction/erection has to be borne by the
consumer. Accordingly, the Applicant recovers the actual cost of labour and ma-

GST LAW TIMES  14th May 2020  169