The services extended by TANGEDCO (electricity generation company) to TANTRANSCO (transmission utility) cannot constitute distribution service.
Levy of GST- This appeal is filed against the ruling the appellant has interpreted it as a value chain to mean the entire value chain of electricity transmission and distribution.
The appellant has contended that therefore the entire value chain of electricity and transmission distribution are much beyond the purview of GST under the constitution.
TANGEDCO is indisputably a generation company and a distribution utility. TANTRANSCO on the other hand is a transmission utility. It is not the case of the appellant that the appellant company is providing transmission services to TANTRANSCO. The appellant contends that the various services extended to TANTRANSCO constitute distribution services. However, as already been stated above, distribution service can be supplied only to consumers in the area of supply of the licensee. Therefore, the services extended by TANGEDCO to TANTRANSCO cannot constitute distribution service.
With respect to deployment of employees to TANSTRANSCO from the appellant, as a matter of fact it has been averred by the appellant that there are two modes, one in which the employees deputed from the appellant to TANTRANSCO are paid by TANTRANSCO and the expenses are debited in that company's books of accounts only. The second mode involves where salary payments are made by the appellant and the same is accounted as receivable from TANTRANSCO. This distinction was not made during the time of hearing before the AAR. In our view, the second mode where the salary payments etc., are paid by the appellant company to the employees deputed to TANTRANSCO (as they are still under the rolls of the appellant) and is booked as receivables from TANTRANSCO, there is no reason to interfere with the AAR's order in para 7.3.4. However, where the employees are paid by TANTRANSCO themselves, there is no service involved in our considered opinion as they are fully under the control of TANTRANSCO only and deemed to be employees of TANTRANSCO for all purposes.
Held that- we do not find any reason to interfere with the order of the Advance Ruling Authority in this matter
The services extended by TANGEDCO (electricity generation company) to TANTRANSCO (transmission utility) cannot constitute distribution service.
Levy of GST- This appeal is filed against the ruling the appellant has interpreted it as a value chain to mean the entire value chain of electricity transmission and distribution.
The appellant has contended that therefore the entire value chain of electricity and transmission distribution are much beyond the purview of GST under the constitution.
TANGEDCO is indisputably a generation company and a distribution utility. TANTRANSCO on the other hand is a transmission utility. It is not the case of the appellant that the appellant company is providing transmission services to TANTRANSCO. The appellant contends that the various services extended to TANTRANSCO constitute distribution services. However, as already been stated above, distribution service can be supplied only to consumers in the area of supply of the licensee. Therefore, the services extended by TANGEDCO to TANTRANSCO cannot constitute distribution service.
With respect to deployment of employees to TANSTRANSCO from the appellant, as a matter of fact it has been averred by the appellant that there are two modes, one in which the employees deputed from the appellant to TANTRANSCO are paid by TANTRANSCO and the expenses are debited in that company's books of accounts only. The second mode involves where salary payments are made by the appellant and the same is accounted as receivable from TANTRANSCO. This distinction was not made during the time of hearing before the AAR. In our view, the second mode where the salary payments etc., are paid by the appellant company to the employees deputed to TANTRANSCO (as they are still under the rolls of the appellant) and is booked as receivables from TANTRANSCO, there is no reason to interfere with the AAR's order in para 7.3.4. However, where the employees are paid by TANTRANSCO themselves, there is no service involved in our considered opinion as they are fully under the control of TANTRANSCO only and deemed to be employees of TANTRANSCO for all purposes.
Held that- we do not find any reason to interfere with the order of the Advance Ruling Authority in this matter