Service tax is not applicable w.e.f.July 1, 2012 under Section 66D(k) of the Finance Act, 1994 (“the Finance Act”) on transmission or / distribution of electricity by an electricity transmission or / distribution utility. An ‘electricity transmission or distribution utility’ has been defined in Section 65B(23) of the Finance Act. It includes the following –
• • The Central Electricity Authority
• • State Electricity Board
• • The Central Transmission Utility (CTU)
• • State Transmission Utility (STU) notified under the Electricity Act, 2003 (36 of 2003)
• • Distribution ortransmission licensee licensed underthe said Act
• • Any other entity entrusted with such function by the Central or State Government
In this context the Education Guide on taxation of service issued by the CBEC dated June 20,2012 (the Education Guide) clarifies as under:
“ If charges are collected by a developer or / a housing society for distribution of electricity within a residential complex then are such services covered under this entry?
No. The developer or the housing society would be covered under this entry only if it is entrusted with such function by the Central or / a State government or if it is, for such distribution, a distribution licensee licensed under the Electricity Act, 2003.
If the services provided by way installation of gen sets or similar equipment by private contractors for distribution of electricity covered by this entry?
No. the entry does not cover services provided by private contractors. Moreover the services provided are not by way of transmission or distribution of electricity.”
Thus if charges are collected by a developer or housing society for distribution of electricity within a residential complex then such activities are not covered under Section 66D(k) of the Finance Act and thus exigible to service tax.
No comments:
Post a Comment