Page 171 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] IN RE : GUJARAT ENERGY TRANSMISSION CORPN. LTD. 273
distribution network up to the premises of the consumers to the applicant, as
mentioned above.
10. We further note that vide Sr. No. 10A of the Notification No.
14/2018-Central Tax (Rate), dated 26-7-2018, the following services supplied by
electricity distribution utilities, have been exempted from levy of CGST :

“Sr. Chapter, Description of service Rate Condi-
No. Section or (per tion
Heading cent.)
(1) (2) (3) (4) (5)
10A Heading No. Services supplied by electricity dis- Nil Nil”.
9954 tribution utilities by way of con-
struction, erection, commissioning,
or installation of infrastructure for
extending electricity distribution
network up to the tube well of the
farmer or agriculturalist for agricul-
tural use.

The above entry grants exemption to the services supplied by electricity distribu-
tion utilities by way of construction, erection, commissioning, or installation of
infrastructure for extending electricity distribution network up to the tube well of
the farmer or agriculturalist for agricultural use. In the above case, the applicant has
supplied the services by way of construction, erection, commissioning, or instal-
lation of infrastructure for extending electricity distribution network up to the
premises of the consumers in the course or furtherance of business. Hence, said exemp-
tion is not available to the applicant.
11. It is 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 [Tax] 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 ser-
vices 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;
Illustration. - Where goods are packed and transported with insurance,
the supply of goods, packing materials, transport and insurance is a com-
posite supply and supply of goods is a principal supply;
11.1 Consideration for both services are charged separately and, hence,
the value of “Construction Services” cannot form part of the value of service of
“Transmission of Electricity” in terms of Section 15 of the Central Goods and
Service Tax Act, 2017. Consequently, the said construction services cannot be
treated as supply of the “Transmission of Electricity” service. In view of the
GST LAW TIMES  14th May 2020  171