The Tamil Nadu Advance Ruling Authority (AAR), held that the value of ‘Deposit Contribution Works’ adopted by the applicant on ‘Self Execution Schemes’ must be the amount charged and received by the applicant in regard to the services.
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The applicant, M/s Tamil Nadu Generation and Distribution Corporation Limited, is a government company and has been engaged in the generation and distribution of electricity and has been registered under the Central Goods and Services Tax (CGST) Act, 2017. The applicant is an “Electricity Distribution Utility” under the Electricity Act of 2003. The application creates power utilizing three major fuels: thermal (coal), hydroelectric (water), and gas generation, as well as non-conventional energy sources such as wind.
The applicant distributes power generated at its generating stations and procured from others to various consumers throughout Tamil Nadu.
One of the major issues raised by the applicant was that What was the value of the Deposit Contribution Works (DCW) that the applicant must adopt on the Self-Execution Schemes in order to pay appropriate taxes under the Central Goods and Services Tax Act, 201,7 and Tamil Nadu Goods and Services Tax Act, 2017. The current application for an Advance Ruling is just about the amount of GST liability that this applicant will have to discharge on the charges received for DCW, which is only a valuation issue.
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The Aurthorised Respresentatives (A R) N. Sriprakash, K.A. Parthasarthi and Thiru. K. Siri chandana, Advocates, , appearing for the applicant explained that in cases of ‘Self Execution’ under DCW, consumers are required to bear the entire costs of shifting of service/lines structure and equipment, including the cost of equipment/materials, with the exception of ‘Establishment and Supervision Charges’ and ‘Other Charges, if any charged by the applicant’.
The bench remarked that the execution of DCW (Deposit Contribution Works) does fall within the scope of supply, although it is very dependent on who or which party executes it. In this regard, the distinction between the nature of transactions engaged under DCW and under “DCW – Self execution mode” is quite important in the context of this case.
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The bench, consisting of D. Jayapriya, I.R.S., [Additional Commissioner/ Member(CGST)] and A. Valli, [Joint Commissioner/Member(SGST)], held that the value of Deposit Contribution Works’ to be adopted by the applicant on ‘Self Execution Schemes’ shall be the amount charged and received by the applicant in relation to the said service
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