Transmission or distribution of electricity - Service Tax Practice Manual / Ready Reckoner - Service Tax

Chapter 11 Transmission or distribution of electricity Effective date: 1.7.2012 Scope of Negative Service Section 66D(k) Transmission or distribution of electricity by an electricity transmission or distribution utility Meter rent is also exempt The CBEC has vide Circular no. 131/13/2010-ST, dated 7-12-2010 clarified that meter renting is essential activity having direct and close nexus with the transmission and distribution of electricity. Therefore, meter rent charged by transmission agency will be covered in above entry and exempt from service tax. Meanings and Definitions: Section 65B (18) - Central Electricity Authority means the authority constituted under section 3 of the Electricity (Supply) Act, 1948; (54 of 1948.) Section 65B (19) - Central Transmission Utility shall have the meaning assigned to it in clause (10) of section 2 of the Electricity Act, 2003; (36 of 2003.) Section 65B (23) - electricity transmission or distribution utility means the Central Electricity Authority; a State Electricity Board; the Central Transmission Utility or a State Transmission Utility notified under the Electricity Act, 2003; (36 of 2003.) or a distribution or transmission licensee under the said Act, or any other entity entrusted with such function by the Central Government or, as the case may be, the State Government; Section 65B (47) - State Electricity Board means the Board constituted under section 5 of the Electricity (Supply) Act, 1948; (54 of 1948.) Section 65B (48) - State Transmission Utility shall have the meaning assigned to it in clause (67) of section 2 of the Electricity Act, 2003; (36 of 2003.) Clarification by the Board (Taxation Guide Guidance Note 4 Exemptions dated 20.06.2012) 4.11 Transmission or distribution of electricity 4.11.2 If charges are collected by a developer or a housing society for distribution of electricity within a residential complex then are such services covered under this entry? No. The developer or the housing society would be covered under this entry only if it is entrusted with such function by the Central or a State government or if it is, for such distribution, a distribution licensee licensed under the Electricity Act, 2003. 4.11.3 If the services provided by way installation of gensets or similar equipment by private contractors for distribution of electricity covered by this entry? No. the entry does not cover services provided by private contractors. Moreover the services provided are not by way of transmission or distribution of electricity.