Case Law Details
Bses Rajdhani Power Ltd & Anr Vs Union of India & Ors (Delhi High Court)
Conclusion: Electricity distribution companies were not entitled to collect gst from their customers and charges for metering equipment, testing fee for meter, labour charges from customers for shifting of meters, charges for bills and application for releasing connection of electricity were all integral part of services of distribution of electricity.
Held: In the instant case, it was noted that the Central Government in exercise of its powers under Section 11 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’), had issued a notification being Notification No.12/2017- Central Tax (Rate) dated 28.06.2017. In terms of the said notification, the intra-State supply of services (transmission or distribution of electricity by an electricity transmission or distribution utility) is exempted from the Goods and Services Tax (GST). Assessee-company was essentially aggrieved by the issuance of the circular being Circular No. 34/8/2018-GST dated 01.03.2018 by the clarification issued at serial No. 4 of the impugned circular. According to assessee, the charges as referred above were included in the charges for provision of services. It was contended that charges for metering equipment, testing fee for meter, labour charges from customers for shifting of meters, charges for bills and application for releasing connection of electricity were all integral part of services of distribution of electricity. In Torrent Power v. Union of India the Gujarat High Court had set aside the circular, the benefit of the same had not percolated to the customers, who were availing the supplies made by assessee. In the aforesaid circumstances, the Court had directed assessee to deposit the GST collected from the customers for the services in question with the Court. It was held that since the impugned circular had been set aside and it was clarified that the supplies mentioned in the impugned circular were bundled supplies and form an integral part of the supplies of distribution of electricity, the said supplies were not chargeable to GST. Consequently, assessee was also not entitled to collect such charges from their customers. In this view, it was opined to direct that any GST collected by assessee-company after 08.11.2023, be refunded to customers from whom the said GST had been collected.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioners have filed the present petition, inter alia, praying as under:
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