TP AJMER RULING: NO GST ON DELAYED PAYMENT CHARGES FOR ELECTRICITY
RAJASTHAN APPELLATE AUTHORITY FOR ADVANCE RULING
GOODS AND SERVICES TAX
BEFORE THE BENCH OF
MS. ARCHANA P. TIWARI, MEMBER
SH. ALOK GUPTA, MEMBER
Case Title : M/S TP AJMER DISTRIBUTION LIMITED
(GST AAAR RAJASTHAN)
Appeal No.RAJ/AAAR/APP/02/2018-19
Advance Ruling No. RAJ/AAR/2018-19/03 dated 11.06.2018
ORDER NO.RAJ/AAAR/22/2018-19
Date of Judgment/Order- 18th October 2018
BRIEF FACTS OF THE CASE
Para No. 8. Tata Power Company Limited (TPCL) has entered into a Distribution Franchisee Agreement (‘DFA’) with Ajmer Vidyut Vitran Nigam Limited (‘AVVNL’). In terms of the aforesaid DFA, TPCL has undertaken to supply Electricity to the customers of AVVNL in Ajmer district, Rajasthan, for a period of 20 years.
Para No. 9 In order to fulfill its obligation under the DFA entered into with AVVNL, TPLC has set up a Special Purpose Vehicle (‘SPV) under the name of M/s TP Ajmer Distribution Limited ( Appellants )
Para No. 10. The Appellants are registered under Central Goods and Services Tax Act, 2017 (‘CGST Act’) and holding GST Registration No. 08AAGCT2158PIZR.
Para No. 11. The appellants are responsible for operating and maintaining the distribution network in Ajmer City and supplying Electricity to Industrial and domestic consumers.
Para No. 12. For the aforesaid activity, the appellants raise invoice on the customers for the consideration for supply of electricity.
Para No. 13, The aforesaid charges are recovered in terms of the Rajasthan Electricity Regulatory Commission (Terms and Condition for Development of Tariff) Regulation, 2014 (hereinafter referred to as “RERC Tariff Regulations”).
Para No. 14. In addition to the Energy charges and distribution charges, the appellants also recover some Non-tariff charges from the customer for certain specific activities carried out by the appellants for the customers.
Para No. 15. The various non-tariff charges collected from the customer can be broadly categorized as –
- Application/Connection fees
- Charges for equipment such as Meters, Transformers, etc.
- Charges for extension of supply lines
- Cheque dishonour fees
- Delayed payment charges
Para No. 16. The aforesaid non-tariff charges are fixed and recovered from the customers in accordance with the provisions of Electricity Act, 2003 and regulations made in this behalf by the Rajasthan Electricity Regulatory Commission (‘RERC”).
DISCUSSION AND FINDINGS
Para No. 23. Having gone through the decision of the Authority for Advance Ruling (AAR) and submissions made by the appellants in written form as well as those made during the course of personal hearing, we find that the issues before us to decide are:-
1. whether the delayed payment charges collected from the consumers for delay in payment of consideration for supply of electricity is liable to GST in terms of Section 15(2) of the CGST Act, 2017; and
2. whether the cheque dishonor fee collected by the appellants is liable to GST.
RULING
Para No.31. Based on the available records, we rule that the no GST is chargeable on the delayed payment charges collected from the consumers for delay in payment of consideration for supply of electricity. While GST is chargeable on the cheque dishonor charges collected (by whatever name) from the consumers.
Para No. 32 The Appeal stands disposed of as above.
