The Punjab Authority for Advance Ruling (AAR) has ruled that services provided by Punjab State Transmission Corporation Limited (PSTCL) for shifting transmission lines on request of National Highway Authority of India (NHAI) Should attract 18% Goods and Service Tax (GST).
The applicant Punjab State Transmission Corporation Limited engaged in the business of transmission of electricity which is exempt from GST Act . Apart from above activity PSTCL executes deposits and contribution work on behalf of third parties.
PSTL executes shifting of Transmission lines on request of NHAI for widening of road by NHAI. In this case total cost of work, that is material cost, labour charges and supervision charges department recharge or recovered from NHAI but the property remains under the ownership of PSTCL.
The applicant has sought an advance ruling in respect of applicability of GST rate services rendered for shifting transmission lines on request of NHAI .
The applicant submitted that transmission or distribution of electricity by an electricity transmission or distribution utility is nil rated. But other services such as meter rent , testing fee for meters /transformers etc are taxable under GST.
Therefore the applicant further contended that transmission of electricity is a continuous supply. Hence, these ancillary services are not provided in conjunction with the supply of electricity transmission services.
Thus, these ancillary services of contribution work or deposit work are provided by the PSPCL at the specific request of the consumer and are not being provided by the PSPCL in its normal course of business to all consumers.
Harminder Singh, account officer of the applicant appeared on behalf of the applicant.
After reviewing the facts and submission of the both parties while going through the copy of contracts with NHAI, it was found that after finalization of road plan details an estimate for composite work is prepared and the party is told to deposit the amount of estimate along with applicable GST 18%.
After reviewing the submissions and provisions the two member bench of Authority of Advance Ruling, Virendra Kaur Viraj (central Taxes) and Shyam Karan thidke (State Taxes) ruled that services of shifting of transmission line on the request ofNHAI would be classified under service Head 998631 and would attract GST at 18% days.
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