The Punjab Bench of the Authority for Advance Ruling (AAR), in the case of Punjab State Transmission Corporation Ltd. has ruled that shifting of Electricity Transmission Lines is subject to GST.
The assessee is operating the business of Transmission of electricity which is not under the law, vide GST Notification No. 12/2017 released on 28th June 2017 (Tariff heading 9969). Besides these activities, PSTCL carries out Deposit and Contribution works on behalf of third parties.
The Question and Ruling
(i) According to which provision/section GST is to be levied on shifting of Transmission Lines on demand of NHAI (Contribution Work) for making the roads wide, at what rate and on what cost i.e.; material, labour, and supervision costs, or only on supervision costs?
Read Also: PB AAR: Not Allowed to Claim GST ITC If Vendor Paid Tax Liability
The services on the request of NHAI concerning the shifting of Transmission Lines would be categorized under Service Head 998631 and would levy GST @ 18% (CGST 9%+ SGST 9%). The value for the purpose of collecting GST should be considered the transaction value, i.e. the price actually paid or payable in accordance with Section 15 of the CGST Act, 2017.
(ii) Following which provision Section GST should be levied on installation and construction of sub-station transmission lines on the basis of big entities/other third parties for power supply (contribution works), at what rate and what cost i.e; material, labour and supervision costs or only on supervision costs?
Recommended: Gujarat GST AAR: No Jurisdiction on Supply of Services and Goods in MP State
The construction and installation services regarding sub-station transmission lines in the name of big entities/other third parties for power supply would be categorized under Service Head 998631 and would be levied GST @18% (CGST 9% + SGST 9%). The value purpose of imposing GST should be the value of the transaction, i.e. the cost would be in accordance with Section 15 of the CGST Act, 2017.
(iii) Since the property ownership is rendered under PSTCL, can PSTCL demand an Input Tax Credit on material and services furnished for the above works (either the assignment is completed by PSTCL itself or on the basis of turnkey)?
Input Tax Credit can be claimed by the applicant on the works completed.
| Applicant Name | Punjab State Transmission Corporation Limited |
| GSTIN of the applicant | 03AAFCP4714J1ZK |
| Date | 30.05.2023 |
| Punjab GST AAR | Read Order |
