The Rajasthan High Court has ruled that GST is not applicable on Meter Charges and Other Charges charged by Jaipur Vidyut Vitran Nigam Limited (JVVNL).
The Rajasthan High Court at Jaipur in the matter of Jaipur Vidyut Vitran Nigam Limited vs. UO I & Ors. has quashed para 4(1) of Circular dated 01/03/2018 which clarified that services supplied by DISCOMS like (i) application fee for releasing connection of electricity; (ii) Rental Charges against metering equipment; (iii) Testing fee for meters/ transformers, capacitors, etc.; (iv) Labour charges from customers for shifting of meters shifting of service lines; and (v) charges for the duplicate bill are taxable under GST.
In the matter, Adv. Sanjay Jhanwar, Adv. Prakul Khurana assisted by Adv. Rahul Lakhwani and Adv. Bhanu Shree Jain from Chir Amrit Legal LLP appeared on behalf of Petitioner JVVNL and argued that Central Government vides Notification No.12/2017 dated 28.06.20 17 exempted services of transmission distribution of electricity.
However, the Impugned Circular excluded the above services which are part of the principle supply of transmission and distribution of electricity. Since the said services are composite services, thus, as per Section 8 of the CGST Act, the rate of GST as applicable on the principle supply shall be applicable. Accordingly, the said services shall also be exempted.
Further, reference was made to the judgment of Hon’ble High Court of Rajasthan at Jodhpur in the case of Jodhpur Vidyut Vitran Nigam Limited vs. UOI & Ors (CW/9397/2018, decided on 05/02/2021) and judgment of Hon’ble High Court of Gujarat in the case of Torrent Power Ltd. vs. Union of India (SCA/5343/2018, decided on 19/12/2018) wherein para 4(1) of the Impugned Circular has been struck down.
The division bench of Justice Sabina and Justice Chandra Kumar Songara held that Impugned Circular sought to bring in tax-net five services enumerated therein, regardless of the fact that complete bundle or package of services namely transmission and distribution of electricity by an electricity transmission or distribution utility have been exempted. The said attempt of chipping out some he services, out of the complete package and treating them to be taxable is not only arbitrary unreasonable but such exercise is also violative of provisions of Section 8 of the CGST Act.
The Order is to be uploaded soon.
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