The Authority of Advance Ruling (AAR), Punjab ruled that services of shifting of transmission lines on request of NHAI attract 18% GST.

BACKGROUND 

The applicant, M/s Punjab State Transmission Corporation Limited is engaged in the business of transmission of electricity which is exempt under GST Act, vide Notification No. 12/2017-CT(R) dated 28.06.2017. PSTCL executes deposit and contribution works on behalf of third parties.

PSTCL undertakes Deposit Work. In case of deposit work, total cost of material, labour and supervision charges are to be paid by the third party to PSTCL and the property in goods (i.e; asset) will be transferred to the said party, which requested PSTCL to execute the work on behalf of them. In case of contribution work, total cost of material, labour and supervision charges are to paid by the third party to PSTCL. However, goods (i.e. asset) is not transferred to third party and asset shall remain the property of the PSTCL. In both the cases, the amount is recovered fully from the third party. 

ISSUE RAISED

  1. Under which provision / section GST is to be charged on shifting of Transmission Lines on request of NHAI (Contribution work) for widening of road, at what rate. and on which amount i.e; material, labour and supervision charges or only on supervision charges?
  2. Under which provision / section GST is to be charged on shifting of Transmission Lines on request of NHAI (Contribution work) for widening of road, at what rate. and on which amount i.e; material, labour and supervision charges or only on supervision charges?

RULING

The AAR held that the services of shifting of Transmission Lines on the request of NHAI would be classified under Service Head 998631 and would attract GST @ 18 % (CGST 9% + SGST 9%). The value for purpose of levy of GST shall be the transaction value, i.e. the price actually paid or payable in terms of Section 15 of the CGST Act, 2017.

The AAR held that he services of construction and installation of sub-station transmission lines on behalf of big industries/other third parties for power supply would be classified under Service Head 998631 and would attract GST @ 18 % (CGST 9% + SGST 9%). The value for purpose of levy 6f GST shall be the transaction value, i.e. the price actually paid or payable in terms of Section 15 of the CGST Act, 2017.

Case Title: M/s Punjab State Transmission Corporation Limited