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TMI Blog2023 (7) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... ical energy at the PCS for its conversion into chemical energy. The applicant also measures the Energy Charges in the number of units of energy consumed for undertaking the said activity of charging of battery and not the amount of electricity transmitted to the consumer for his further application or usage. Thus the activity of charging of electric vehicle does not amount to supply of electricity or supply of any moveable property, but it is a supply of service. In the instant case, it is admitted that the Public Charging Stations (PCS) proposed by the applicant do not have licence as required under the Act, 2003 and the consumer lacks any premises for transmission through a service line or otherwise. The consumer is also not supplied with electricity, rather gets his electric vehicle battery charged using the electricity. Thus even in terms of the Electricity Act, 2003 the activity does not amount to supply of electricity - the owner of the Electric Vehicle is being allowed to use the infrastructure/facilities that are provided by the charging station and therefore the said activity amounts to supply of service, for which the applicant admittedly collects Electric Vehicle Char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the input paid on inputs and input services, as provided under Rule 42 and 43 of the GST Rules? - HELD THAT:- It is observed that the question is not specific and as such the applicant can avail input tax credit and utilize the same in terms of Sections 16 17 of the CGST Act 2017 read with Rules 42 and 43 of the CGST Rules 2017. - KAR ADRG 24/2023 - - - Dated:- 13-7-2023 - DR. M.P. RAVI PRASAD AND SRI. KIRAN REDDY T, MEMBER Represented by : Sri. Y C Shivakumar, Advocate, Authorised Representative ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 AND UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/s. Chamundeswari Electricity Supply Corporation Ltd., # 29, 2nd Stage, Vijayanagar, Hinkal, Hinkal Village, Mysuru - 570017, Karnataka, having GSTIN 29AACC6636P1Z1, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in form GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act, KGST Act. 2. The applicant stated that they are a limited company, registered under the CGST / KGST Acts, regularly filing the returns and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ministry of Power, vide its Clarification dated 13-04-2018; and c) If the supply of electrical energy and service charges are treated as two different components, then whether the supply of electrical energy is exempt as per serial number 104 of Notification No. 2/2017-Central Tax (Rate), dated 28-06-2017 (HSN 2716 00 00) and service charges is taxable as per Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017; d) If both the components are treated as supply of service , then the Service Accounting Code and the rate of tax applicable under the GST and the relevant notification, may please be clarified; e) Whether the GST collected, which is treated as output tax, can be set-off against the input paid by the Corporation on its inputs and input services, as provided under Rule 42 and 43 of the GST Rules. 4. Admissibility of the application : The applicant claimed that the questions on which advance rulings have been sought are with regard to classification of any goods or services or both ; Applicability of a notification issued under the provisions of the CGST Act 2017 ; Admissibility of input tax credit of tax paid or deemed to have been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges, re-sealing charges, rentals collected from TV cable operators, one-time maintenance cost from new layouts, line shifting charges etc. are taxable at present. (There are nearly 90+ services and the above items are illustrative and not exhaustive). These are called auxiliary services or support services on which GST is collected by the applicant which is an output tax and paid every month by the applicant. 5.3 The applicant intends to set up various public charging stations (PCS) on its own, for charging electric vehicles (EVs), both two-wheelers and four-wheelers. The charging of a battery in EVs requires electricity and the applicant will provide electricity supply to these public charging stations. All electric vehicle users can access these public charging stations for battery charging. The applicant would like to issue tax invoices and collects Electric Vehicle Charging Fee , which includes two components (a) Energy Charges , and (b) Service Charges . Energy Charge refers to the number of units of energy consumed and the Service Charge refers to the services provided by the charging station, i.e. the cost of setting up the service station and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as supply of service and taxable under the GST Acts. If that is so, the rate of tax and the SAC of such service may be clarified. 5.6 The Applicant is of the opinion that the clarification of the Ministry of Power, vide its Clarification dated 13-04-2018, is with regard to obtaining license to operate the charging station. While clarifying so, it states that the charging stations do not require license under the Electricity Act, 2003, since charging stations do not perform any of the activities, namely, transmission, distribution and trading of electricity. 6. Applicant s Interpretation of Law: The applicant furnished their interpretation of law inter alia stating as under: 6.1 ISSUES ON WHICH ADVANCE RULING IS SOUGHT SL.No. Nature of Supply Recipient Supply is Goods / Services HSN / SAC Applicable Notifications / Circulars Advance Ruling sought 1 2 3 4 5 6 7 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings and reiterated the facts narrated in their application. FINDINGS DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matters and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the applicant the submissions made by their learned representative during the time of hearing. 10. The applicant is a limited company engaged in sale of Electrical energy and also transmission distribution of Electricity. They intend to set up various Public Charging Stations (PCS) on their own, for charging batteries of Electric Vehicles (EVs), both two wheelers and four wheelers. The charging of a battery in EVs requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for any purpose; or (b) used for any purpose except the transmission of a message; Section 2(70) : supply , in relation to electricity, means the sale of electricity to a licensee or consumer; Section 2(71) : trading means purchase of electricity for resale thereof and the expression trade shall be construed accordingly; Section 2(15) : consumer means any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force and includes any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be; Section 2(39) : licensee means a person who has been granted a licence under section 14; Section 2(49) : person shall include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person; Section 2(51): premises includes any land, building or structure; Section 2(61) : service-line ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s count also. Moreover it is also admitted by the applicant that the Ministry of Power, Government of India have also clarified that there is no requirement of licence for EV charging stations. Thus the applicant s activity of charging of battery does not involve sale of electricity to any person as the electricity is consumed by the charging station and thus the electrical energy is put to use as a consumable, for charging of battery. In other words the owner of the Electric Vehicle is being allowed to use the infrastructure/facilities that are provided by the charging station and therefore the said activity amounts to supply of service, for which the applicant admittedly collects Electric Vehicle Charging Fee as consideration. Thus the impugned activity amounts to supply of service in terms of Section 7(l)(a) read with Section 2(102) of the CGST Act 2017. 13. Further, the Ministry of Power, Government of India, New Delhi vide their letter No. 23/08/2018-R R dated 13.04.2018 issued a clarification on charging infrastructure for Electric Vehicles with reference to the provisions of the Electricity Act 2003, in paras 3 4, in accordance to which charging of battery involves u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons out of the energy sourced through the battery and thus the said vehicle qualifies to be a motor car. Thus charging the batteries of such electric vehicles amounts to charging of the batteries of motor cars and thus the impugned activity squarely gets covered under SAC 998714. Further Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended, prescribes GST rate of 18% (CGST-9% and KGST-9%) vide entry number 25(ii) for the impugned activity/service. 18. Now we consider the last question i.e. whether the output tax can be set off against the input paid on inputs and input services, as provided under Rule 42 and 43 of the GST Rules. It is observed that the question is not specific and as such the applicant can avail input tax credit and utilize the same in terms of Sections 16 17 of the CGST Act 2017 read with Rules 42 and 43 of the CGST Rules 2017. 19. In view of the foregoing, we pass the following RULING a) The charging of electric battery is an activity amounting to supply service, i.e., Battery Charging Service for motors. b) The supply of electrical energy and service charges together are to be treated as supply of service . c) T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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