Page 173 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] IN RE : GUJARAT ENERGY TRANSMISSION CORPN. LTD. 275
tion of India Ltd. and other Transmission Licensees to the inter-connection points
of the DISCOMS (Distribution utilities) and also undertakes the functions of State
Transmission Utility, State Load Dispatch Centre and System Operator as pro-
vided in the Electricity Act, 2003. Accordingly, pro rata charges are recovered by
them considering the augmentation to be carried out at the upstream sub-station
and augmentation of existing sub-station. Other charges like as pro rata charges,
proportionate line charges, registration fees, operation and maintenance charges
etc. recovered by GETCO from its various consumers are nothing but the consid-
eration to enable them to create future assets for the mandate it is given. Thus,
GETCO recovers said charges for providing electric line or electrical plant or oth-
er facilities for the purpose of giving the supply of electricity to the consumers.
1 12.1 We find that by virtue of the Entry No. 25 of the Notification No.
12/2017-Central Tax (Rate), dated 28-6-2017, only the service of “transmission and
distribution by an electricity transmission or distribution utility” was exempted from
tax under the GST Acts. A comparison with Regulation 3 of the Notification No.
9, dated 31-3-2005 issued by the Gujarat Electricity Regulatory Commission
(GERC), shows that the charges are for “any expenses that the Distribution Li-
censee shall be required to reasonably incurred to provide any electric line or
electrical plant specifically for the purpose of giving such supply to the appli-
cant”. Thus, the nature of services provided by GETCO in the present case is not
covered under the above exemption entry of the Notification No. 12/2017-
Central Tax (Rate), dated 28-6-2017. Said amounts are recovered from consumers
for providing of their electric line or electrical plant or other facilities for the pur-
pose of giving the supply of electricity to them, which are ancillary services pro-
vided in relation to service of the transmission of electricity. Electricity charges
recovered for consumption of electricity are only exempted under above entry.
Amount collected towards other ancillary services are taxable under GST. These
services are, therefore, taxable under GST under the residual category of services
i.e. “9997 99 - Other services n.e.c.” and, hence, GETCO is liable to pay GST @ 18%
(CGST @ 9% and SGST @ 9%) on aforesaid other charges recovered from its con-
sumers.
13. In view of the foregoing discussion, we rule as under -
RULING
Question : Whether or not the cost of construction/erection of
Bays/Sub-Stations, Overhead lines and Underground Ca-
bles and other charges including pro rata charges, supervi-
sion 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 Services Tax [Act], 2017
and since the said service is exempt 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?
Answer : Answered in the Negative. The cost of construc-

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1 Paragraph number as per official text.
GST LAW TIMES  14th May 2020  173