In re Gujarat Energy Transmission Corporation Ltd. (GST AAR Gujrat)
In a significant ruling by the Gujarat Authority for Advance Ruling (AAR), M/s. Gujarat Energy Transmission Corporation Ltd. (GETCO) has been granted relief concerning the Goods and Services Tax (GST) on charges recovered for deposit work activities related to electricity transmission infrastructure. The AAR has held that these charges, which include material and erection, pro-rata, supervision, proportionate line charges, and registration fees, are exempt from GST under Entry No. 25A of notification number 12/2017 – Central Tax (Rate) as amended by Notification No. 8/2024-CT(R) on October 8, 2024 This exemption is effective from October 10, 2024.
Background of the Case
GETCO, a wholly-owned subsidiary of a Gujarat government undertaking, is designated as the State Transmission Utility (STU). Its primary function, as defined by the Electricity Act, 2003, is the transmission of electricity. This involves undertaking transmission, planning, coordination, and ensuring the efficient and economical development of the intra-state transmission system.
GETCO undertakes various construction and erection activities, such as building bays, substations, overhead lines, and underground cables. These activities are often necessitated by increased generating capacity, rising electricity demand, system strengthening, or specific requests from consumers and DISCOMs for augmentation of transmission facilities. GETCO recovers the costs associated with these “deposit work activities” from consumers, in accordance with regulations set by the Gujarat Electricity Regulatory Commission (GERC).
