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TMI Blog2022 (2) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... AT:- If an action or event is subject to something, it needs something to happen before it can take place. It means the second question is subject to answer of first question. If the services supplied by the UPPTCL to the applicant are exempt, then there is no question of input tax credit of the same. The question of input tax credit only arises, when the services supplied by the UPPTCL to the applicant are taxable. As we have not admitted the first question for the advance ruling, the answer of second question (being subject to first question) is not being answered because the same is out of purview of authority of advance ruling. Whether the Applicant is liable to deduct Tax at Source (TDS) on the amount paid to UPPTCL for services supplied by it? - HELD THAT:- If an action or event is subject to something, it needs something to happen before it can take place. It means the third question is subject to answer of first question. If the services supplied by the UPPTCL to the applicant are exempt, then there is no question of deduction of TDS. The question of deduction of TDS only arises, when the services supplied by the UPPTCL to the applicant are taxable - as the first quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Inside Battery Limit (ISBL): It is carried out by the Applicant itself 2. Outside battery Limit (OSBL): It includes construction of transmission towers, transmission line and hybrid bay, which will be undertaken by UPPTCL. For executing this work, UPPTCL will collect the actual costs from the Applicant. Apart from this, UPPTCL will also issue NOC for connecting of ISBL part with its grid by the Applicant, for which supervision of UPPTCL is required and supervision charges are also collected by UPPTCL from the Applicant. The said works shall be carried out on deposit works basis. viii. The ownership of transmission infrastructure developed by UPPTCL remains with UPPTCL and is reflected as fixed assets in the books of UPPTCL. The exclusive rights to operate, manage and maintain the infrastructure shall rest with UPPTCL. ix. The contribution received from the Applicant under the deposit work is reflected separately as financial assistance by UPPTCL in its books of accounts and the interest earned on it or the depreciation claimed on the fixed assets is not taken into consideration for computation of transmission charges by UPPTCL. 3. The applicant has soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fectuates provisions of Section 51. (iv) Section 97(2)(e) covers the aspect of determination of the liability to pay tax on any goods or services or both. Since the Applicant is the recipient of the subject services from UPPTCL, the question of availability of exemption to supply of such services is also covered under Section 97(2)(e). (v) The decision of the Advance Ruling Authority is given to an applicant, in relation to supply of goods or services or both. The phrase 'in relation to' is a very wide expression and is used in an expansive sense. In this regard, reliance is placed on decision of Hon'ble Supreme Court in Doypack Systems (Pvt) Limited v. Union of India, 1988 (36) ELT 201 (SC). (vi) As per the understanding of the Applicant, the services supplied by UPPTCL under the agreement to carry out deposit work, as agreed upon between the Applicant and UPPTCL, are in nature of transmission of electricity for the reasons furnished hereunder, which are exempt from payment of GST. (vii) Entry No. 25 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 notifies the following service to be exempted from the levy of GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xv) 'Distribution system' is defined under Section 2(19) of the Electricity Act as under: 2(19) Distribution system means the system of wires and associated facilities between the delivery points on the transmission lines or the generating station connection and the point of connection to the installation of the consumers. (xvi) Section 43 of the Electricity Act requires every distribution licensee to mandatorily supply electricity to the owner or occupier of any premises within one month after the receipt of the application. Further, where the supply of electricity requires extension of distribution lines or commissioning of new substations, the distribution licensee shall supply electricity to such premises immediately after such extension or commissioning. (xvii) Section 43(2) provides that it shall be the duty of a distribution licensee to provide, if required, electric plant or electric line for giving electric supply to the premises of the consumer. (xviii) Section 46 of the Electricity Act empowers State Commission to authorize a distribution licensee to charge from a person requiring a supply of electricity in pursuance of Section 43, any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit Works is an integral part of transmission of electricity services, as without undertaking the said works, it is impossible to transmit electricity at increased load to DISCOMs and the DISCOMs to subsequently supply the same to the Applicant. (xxiv) In view of above, it is clear that deposit work undertaken by UPPTCL is integral part of supply of service of transmission of electricity. Such services are specifically covered under Entry No. 25 of Notification 12/2017 and thus, exempt from payment of GST. (xxv) As per the understanding of the Applicant, the deposit work undertaken by UPPTCL forms an integral part of the service of transmission or distribution of electricity as discussed above. Assuming, without accepting, that the deposit work does not constitute an integral part of transmission or distribution of electricity, it is still naturally bundled with and ancillary to the principal supply of transmission or distribution of electricity for the reasons given below. (xxvi) the providing the electric line and electric plant are elements of supply, which are naturally bundled in the ordinary course of business, with the single supply of transmission and distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L are in nature of pure services. Such services, thus, do not qualify as 'works contract' and the restriction of Section 17(5)(c) is not applicable thereon. (xxxii) A PSU is a company, where majority i.e. 51% or more of the paid-up share capital is held by the Central Government or State Government or partly by the State Government and partly by one or more State Governments. In the present case, as 51.50% share capital of the Applicant Company is held by the Central Government, it is a PSU. (xxxiii) the Applicant, it is not liable to deduct TDS in light of the proviso inserted to Notification No. 50/2018- Central Tax dated 13.09.2018 vide Notification No. 61/2018-Central Tax dated 05.11.2018 w.e.f. 01.10.2018. (xxxiv) UPPTCL was incorporated in compliance of the Government of Uttar Pradesh letter no. 293 dated 16.05.2006 and is also owned by the Government of Uttar Pradesh. It is a State Government undertaking established to function as a State transmission Utility in terms of Section 39 of the Electricity Act. Therefore, in light of the above discussion, it is clear that both the Applicant and UPPTCL are PSUs and the service of deposit work is supplied to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue UP AIR 1974 AL 202 (4) Ram Kripal Singh Vs. UP State Road Transport Lko.-1992 AWC 1147 AB (5) Uoi Vs Brigadior PS Gill 2012 (279) ELT 321 SC (6) Torrent Power Ltd Vs. UOI-2019 (1) TMI 1092-GUJRAT HIGH COURT (7) Jodhpur Vidyut Vitran Nigam Ltd Vs UOI-2021-VIL-95-RAJ (8) AAR GST WB Order in Re Dipak Kant Mazumdar Dynamic Enginners-2020 (35) GSTL 363 (9) AAR GST WB Order in Re Daman Techno Waste Management Pvt Ltd-202 (35) GSTL 413 (10) GST AAR in Re Singh Transport Agency-2019 (31) GSTL 161 (11) GST AAR in Re Udupi Nirmiti Kendra-2021-TIOL-139 DISCUSSION AND FINDING 8. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the CGST Act'. 9. We find that the applicant has sought advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is out of purview of authority of advance ruling. 13. We find that the in third question, the applicant have sought ruling as to whether the applicant is liable to deduct Tax at Source (TDS) on the amount paid to UPPTCL for services supplied by it and have used prefix 'subject to above' before the question. If an action or event is subject to something, it needs something to happen before it can take place. It means the third question is subject to answer of first question. If the services supplied by the UPPTCL to the applicant are exempt, then there is no question of deduction of TDS. The question of deduction of TDS only arises, when the services supplied by the UPPTCL to the applicant are taxable. As we have not admitted the first question for the advance ruling, the answer of third question (being subject to first question) is not being answered because the same is out of purview of authority of advance ruling. 14. In view of the above discussions, we pass an order as follows: ORDER Question 1. Whether the services supplied by UPPTCL to the Applicant are exempt from payment of GST under Entry No. 25 of Notification No. 12/2017-Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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