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TMI Blog2019 (1) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... PGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE - 3.1 The Applicant is a Public Sector Undertaking fully owned by Government of Madhya Pradesh and engaged in distribution and supply of electricity in 20 districts of Madhya Pradesh. 3.2 Applicant is involved in electrification work in to the rural and urban areas under the various Government Schemes; it supplies electricity to all the commercial users and noncommercial consumers and recovers charges for supply of electricity along with other non-tariff, 3.3 Applicant issues bills of supply of electricity to its consumers, which has a particular due date to pay, every payment received after the due date mentioned in bills is liable to pay delay payment charges. 4. QUESTION RAISED BEFORE THE AUTHORITY - Whether 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 distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. 6.5. In addition to the energy charges and distribution charges, the applicant also recovers some Non-Tariff charges from the consumer for certain specific activities carried out by the applicant for the consumer. 6.6. The various non-tariff charges collected from the consumer includes Delay Payment Charges. The Madhya Pradesh Electricity Supply Code, 2013 specify the recovery the delayed payment Surcharge, same is reproduced under - 9.9 All categories of consumers committing default in the payment of the billed amount shall be liable to pay delayed payment surcharge, on the amount outstanding. al rates as per applicable retail supply tariff order. 6.7. The Delayed payment surcharge is a part of Tariff prescribed by MPERC. The Company is duty bound to charge rates as fixed by the Authority and nothing in addition, in any manner. The Delayed Payment Surcharge is billed to consumer when the bill is paid by the consumer after the due date mentioned in the bill. The Delayed Payment Surcharge may be mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince, 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. 6.10 Electrical Energy- As per Notification No. 2/2017- Central Tax (Rate) dated 28th June, 2017 the electrical energy as a goods had been exempted from GST. Sl. No. Chapter/Heading/Sub-heading/Tariff item Description of Goods 104 27160000 Electrical Energy Thus based on the above facts, it is concluded that both the activity of distribution &Transmission and retail supply of Electricity by the applicant is exempted. 6.11 CIRCULAR NO. 34/8/2018-GST, DATED- 01st MARCH 2018 Vide Circular No. 34/8/2018-GST, Dated - 01st March 2018, Clarification was issued under direction of fitment committee regarding GST in respect of certain services, where in whether the activities carried by DISCOMS against recovery of charges it had been clarified consumers under State Electricity Act are exempt from GST?. The clarification is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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. 8. DISCUSSION AND FINDINGS: The issue raised by the applicant and the material on record are discussed below- 8.1 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. 8.2 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) dated 28th June, 2017 and corresponding notification issued under MPGST Act,2017 is not exhaustive and some of the services that are provided by the DISCOMS are taxable under Goods and Services Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or penalty tor delayed payment of any consideration for any supply, than same shall be included in the value of such supply. We also observe that component of interest and delayed payment charges are obviously having a direct relation with the value of supply to which such interest/delayed charges relate. These are in fact components of the value of supply and do not have any independent status. Further, 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. Attention 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. Thus, 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/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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