In Re: M\/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (MPPKVVCL)
GST
2019 (1) TMI 418 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – 2019 (20) G. S. T. L. 810 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – AAR
Dated:- 22-11-2018
Order No. 19\/2018 Case No. 20\/2018
GST
RAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY MEMBER
\nPresent on behalf of applicant: Shree Anil Kumar, Authorized Representative
\nPROCEEDINGS
\n(Under section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017)
\n1. The present application has been filed u\/s 97 of the Central Goods & Services Tax Act. 2017 and MP Goods & Services Tax Act, 2017 (hereinafter also referred to CGST Act and MPSGT Act respectively) by M\/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (hereinafter also referred to as applicant), registered under the Goods & Services Tax.
\n2. The provisions of the CGST Act and MPGST Act are identica<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n received after the due date mentioned in bills is liable to pay delay payment charges. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on the company. The Madhya Pradesh Electricity Regulatory Authority (MPERC) is an Independent Authority fix rates of supply of power in the State of Madhya Pradesh. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the bill as Surcharge on Outstanding Amount or Late Payment Surcharge. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n or SAC code = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \ni. Application fee for releasing connection of electricity; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the Rajasthan Appellate Authority for Advance Ruling, GST as mentioned above is relevant in the instant case as it is the common practice amongst the electricity distribution Companies to recover the delay payment charges from the consumers in case of delay in payment. Further, the nature of income in the case of applicant and TPADL is same. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n as mentioned above as per the ruling of Rajasthan Appellate Authority for Advance Ruling. GST the Delay Payment Charges is exempted as the value of main supply i.e., electricity is exempted. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: M\/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (MPPKVVCL)GST2019 (1) TMI 418 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – 2019 (20) G. S. T. L. 810 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – AARDated:- 22-11-2018Order No. 19\/2018 Case No. 20\/2018 GSTRAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY MEMBER … Continue reading “In Re: M\/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (MPPKVVCL)”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16076","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16076"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16076\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16076"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16076"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n4. QUESTION RAISED BEFORE THE AUTHORITY –
\nWhether applicant is eligible to avail the exemption from the levy of GST under Entry no. 25 of notification 12\/2017- Central Tax (Rate) Dated 28\/06\/2017 bearing description 'Transmission or Distribution of electricity by an electricity transmission or distribution of electricity utility' with respect to the Delay Payment Charges recovered by the applicant from its consumers.
\n4.2 If answer of Question no. 1 is negative then what will be the applicable rate of tax and HSN\/SAC code for Delayed Payment Charges.
\n5. DEPARTMENT'S VIEW POINT –
\nThe concerned officer, The Joint Commissioner CGST and Central Excise Hqrs. jabalpur submitted that as per section 15(2)(d) of CGST Act, 2017 the value of supply shall include interest or late fees or penalty for delayed payment of any consideration for any supply. Further, as per the advance ruling authority <\/p>\n
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\n6.4. The MPERC exercises the powers conferred by section 50 of the Electricity Act, 2003 for framing rules and regulations to frame Madhya Pradesh Electricity Supply Code,2013 same is reproduced under-
\nThe State Commission shall specify an electricity supply code to provide for recovery of electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non-payment thereof, restoration of supply of electricity; measures for preventing tampering, distress or damage to electrical plant, or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the meter; entry for replacing, altering or maintaining electric lines or electrical plants or meter and such other matters.
\n6.5. In addition to the en<\/p>\n
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\n6.8 EXEMPTION NOTIFICATION FOR TRANSMISSION AND DISTRIBUTION OF ELECTRICITY BY UTILITY-
\nA. Electricity Transmission and Distribution Services –
\n1. Notification No. 12\/2017- Central Tax (Rate) dated 28th June, 2017 –
\nAs per Notification No. 12\/2017-Central Tax (Rate) dated 28th June, 2017 the activity of Transmission or distribution of electricity by an electricity transmission or distribution utility is NIL rate of GST-
\nSl.No.
\nService Code (Tariff) or SAC Code
\nDescription of Services
\nRate (per cent.)
\nCondition
\n25
\nHeading 9969
\nTransmission or distribution of electricity by an electricity transmission or distribution utility.
\nNil
\nNil
\nFurther, the definition given under Notification No. 12\/2017- Central Tax (Rate) dated 28.06.2017 is as under –
\n“electricity transmission or distribution utility” means the Central Electricity Authority; a State Electricity Board; the Central Transmission Utility or a Sta<\/p>\n
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\nDescription of Services
\nRate (per cent.)
\nCondition
\n13
\nHeading 9969
\nElectricity, gas, water and other distribution service.
\n9
\n
\nBeing general clause at S.No. 13 Notification No. 11\/2017- Central Tax (Rate) dated 28th June, 2017 applicable in cases of electricity distribution services provided by the person other than electricity transmission and distribution utility.
\nSince, the applicant is covered in the definition of electricity transmission and distribution utility and there is specific exemption for such class of person under Notification No. 12\/2017- Central Tax (Rate) dated 28th June, 2017, therefore, in the instant case the distribution and transmission of electricity services provided by the applicant is exempted.
\n6.10 Electrical Energy-
\nAs per Notification No. 2\/2017- Central Tax (Rate) dated 28th June, 2017 the electrical energy as a goods had been exempted from GST.
\nSl. No.
\nChapter\/Heading\/Sub-heading\/Tariff item
\nDescription of Goods
\n104
\n2716<\/p>\n
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\nii. Rental Charges against metering equipment;
\niii. Testing fee for meters\/ transformers, capacitors etc.;
\niv. Labour charges from customers for shifting of meters or shifting of service lines;
\nv. charges for duplicate bill;
\nProvided by DISCOMS to consumer are taxable.
\nThus vide above circular it is clarified that the, not all the services of the DISCOMS are exempted.
\n7. ADVANCE RULLING ISSUED BY THE RAJASTHAN AUTHORITY OF ADVANCE RULING and appeal order on the issue by THE RAJASTHAN APPELLATE AUTHORITY OF ADVANCE RULING GST
\n7.1 Rajasthan authority of advance ruling, GST vide order no. RAJ\/AAR\/2018-19\/02, Dated 11\/05\/2018 = 2018 (6) TMI 1196 – AUTHORITY FOR ADVANCE RULING – RAJASTHAN issued ruling on the same matter in case of M\/s. TP Ajmer Distribution Limited (TPADL). The authority in the instant case provide ruling in case of Delay Payment Charges as under –
\n“As per Section 15(2)(d) of the CGST Act, 2017-
\n15(<\/p>\n
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\n8. DISCUSSION AND FINDINGS:
\nThe issue raised by the applicant and the material on record are discussed below-
\n8.1 Vide Notification No. 12\/2017- Central Tax (Rate) dated 28th June, 2017 and corresponding notification issued under MPGST Act,2017 and Notification No. 2\/2017- Central Tax (Rate) dated 28th June, 2017 and corresponding notification issued under MPGST Act, 2017 both the activity of distribution & Transmission and retail supply of Electricity by the applicant is exempted.
\n8.2 Further, Vide Circular No. 34\/8\/2018-GST, Dated 01st March 2018, it had been clarified that exemption granted under Notification No. 12\/2017- Central Tax (Rate) <\/p>\n
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\n(2) The value of supply shall include
\n (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier;
\n (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both;
\n (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at t<\/p>\n
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\nAttention is drawn towards fact the applicant is recovering delay payment charges not only towards supply of electrical energy as goods, supply Transmission\/distribution of electricity service as an electricity distribution utility which are exempted, but also towards charges like metering charges and others which are taxable as per Circular No. 34\/8\/2018-GST, Dated – 01st March 2018.
\nThus, in the instant case the supply in question is set of both, exempted (i.e., distribution & Transmission, retail supply of Electricity) and taxable supply (i.e., the other services as per circular no. 34\/8\/2018- GST, dated – 01st March, 2018).
\nTherefore, based on the above facts it can be concluded that the Delayed payment surcharge cannot be treated as separate service and same shall be included in the value <\/p>\n
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