Case Law Details
In re Uttar Pradesh Power Transmission Corporation Limited (AAR Uttar Pradesh)
The Authority for Advance Ruling (AAR) Uttar Pradesh recently issued a pivotal ruling regarding the applicability of GST on supervision charges related to the installation of electricity lines by the Uttar Pradesh Power Transmission Corporation Limited (UPPTCL). The case primarily addresses whether the cost of materials and execution work, borne by the recipient of the service, should be included in the taxable value under GST, where UPPTCL only charges for supervision. This detailed analysis aims to dissect the AAR’s decision, contextualize its implications, and elucidate the rationale behind the ruling.
The UPPTCL, responsible for installing and maintaining electricity transmission infrastructure, occasionally performs “deposit work” for consumers. In such cases, the cost of installing new lines or modifying existing ones is covered by the consumer, while UPPTCL supervises the work. The application for advance ruling addressed two methods of deposit work:
- First Method: The consumer arranges for all materials and hires a contractor. UPPTCL supervises the work and charges a supervision fee.
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