9911796707
TMI BlogSERVICE TAXX X X X Extracts X X X X X X X X Extracts X X X X ..... SERVICE TAX X X X X Extracts X X X X X X X X Extracts X X X X ..... es 6(3) of Cenvat Credit Rules 2004. Thanks. Bimal Shah Reply By YAGAY and SUN: The Reply: Service tax on electricity As electricity is understood as 'goods', there is clarity on the aspect that it would not be covered under the ambit of 'activity' falling under the definition of 'service' liable to tax. Additionally, "transmission or distribution of electricity by an electricity transmissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or distribution utility" is covered in the negative list (Section 66D of Finance Act, 1994). Service of transmission and distribution by utilities (licensed / notified under Electricity Act, 2003) is therefore out of service tax net. With this, we can conclude that service tax is not applicable on electricity including transmission & distribution by utilities. the Constitution Bench of the Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in State of A.P. etc. v. National Thermal Power Corpn. Ltd. and Ors. etc. ( 2002 (4) TMI 694 - SUPREME COURT OF INDIA ) holding that electricity though an intangible object is 'goods' covered by Entry 54 of List II of Schedule VII to the Constitution of India. The CEGAT Bench 'D' (New Delhi) in M P Electricity Board reported in 1990 (10) TMI 184 - CEGAT, NEW DELHI confirmed the levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Duty on Electricity when electricity was chargeable to excise duty at the rate of 2 paise per KWH under Item No. 11-E CET under Section 3 of Central Excises and Salt Act, 1944. After analyzing the above decisions pronounced by the Apex Court and other High Courts I am of the view that "In the case of electrical energy, generation or production coincides almost instantaneously with its con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption. Sale, supply and consumption takes place without any hiatus. Electricity is movable property though it is not tangible. It is goods which finds a mention in both Central Excise and Customs Tariff Act under the Tariff item no.2716 00 00 and the description of the same in the tariff is "Electrical Energy". Electrical Energy is nothing but Electricity". Hence it is a settled law that 'elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tricity' is goods and also excisable goods which find a mention in The Central Excise Tariff Act. It is also necessary to mention here that generation and distribution of electricity was chargeable to excise duty for a limited period and currently the same has been withdrawn. Any supply of electricity and money realised from such supply is towards supply of goods, it would tantamount of "trading i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n goods". The Constitution of India authorizes only the respective States in India to levy a tax on sale of goods within the said State. Accordingly, if there is any authority which should tax electricity it should be only the State Government and The Central Government cannot command any jurisdiction for the limited purpose of taxation under the Finance Act, 1994. Let us take the case of instal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of a generator set in the premises of the service provider and electricity that is being generated from the said generator is also being supplied to the service receiver. Generator is used to manufacture rather generate "electricity" which is excisable goods and if there is any tax or duty that is applicable it should be only excise duty at the rate prescribed by The Central Excise Tariff A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. There are numerous instances as above where the service tax department has travelled beyond its powers and levied and continues to levy service tax on "goods". Alas, the "State" remains a mere spectator. Reply By Himansu Sekhar: The Reply: You will have to reverse the proportionate credit as per the decision of the Hon'ble Supreme Court in the case of Maruti Suzuki. Reply By YAGAY and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SUN: The Reply: Supreme Court of India M/S Maruti Suzuki Ltd vs Commr.Of Central ... on 17 August, 2009 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No. 5554 of 2009 (Arising out of S.L.P. (C) No.3826 of 2009 )M/s. Maruti Suzuki Ltd. ... Appellant (s) Versus Commissioner of Central Excise, Delhi-III ... Respondent(s) WITHCivil Appeal No. 5555 of 2009 -(Arising ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of S.L.P. (C) No.5362 of 2009)
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
I endorse the views of Yagay & Son X X X X Extracts X X X X X X X X Extracts X X X X
|
