Gujarat AAR Clarifies GST Exemption for Charges Related to Electricity Transmission Services:

Gujarat AAR Clarifies GST Exemption for Charges Related to Electricity Transmission Services The present application (No. Advance Ruling/SGST&CGST/2025/AR/05), dated February 18, 2025, has been filed by a company named M/s. Gujarat Energy Transmission Corporation Limited (applicant) before the Gujarat Authority for Advance Ruling Goods and Services Tax (GST), D/5, Rajya Kar Bhavan, Ashram Road, Ahmedabad-380 009. The applicant is registered under the GST department and has a registered address at Sardar Patel Vidyut Bhavan, Race Course, Vadodara-390007, hence possessing GSTIN 24AABCG4029R2ZC.

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The applicant is involved in the business of transmission of electricity and is a wholly owned subsidiary of Gujarat Urja Vikas Nigam Limited (owned by the government). In the past, the Gujarat government had notified the applicant as "State Transmission Utility (STU)," effective from June 1, 2004, in exercise of its powers granted under Section 39(1) of the Electricity Act, 2003, vide notification issued on May 29, 2004. The activities undertaken by the applicant are classified under Section 39(2) of the Electricity Act. In respect of his business, the applicant has sought the present advance ruling (No. GUJ/GAAR/R/2025/33), dated September 06, 2025. Questions Asked by Applicant: The applicant, M/s. Gujarat Energy Transmission Corporation Limited has asked the following question seeking the AAR Gujarat: "Question. Whether the charges recovered by the applicant from consumers for deposit work activities such as construction and erection of bays, substations, overhead lines and underground cables, for and on behalf of its consumers, under different heads such as material and erection charges, pro-rata charges, supervision charges, proportionate line charges, and registration fees etc. which are incidental and ancillary to the principal supply of transmission of electricity are exempt from tax under the GST Acts under Entry No. 25A of Notification No. 12/2017 dtd. 28.06.2017 as introduced by Notification No. 8/2024-CT(R) dtd. 08.10.2024."

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Answers Given by AAR Gujarat: The Gujarat Authority for Advance Ruling Goods and Services Tax (GST) has given the following answer to the question of the applicant: Answer. The applicant charges consumers for work related to electricity connections, like building and setting up bays, substations, overhead lines, and underground cables. These charges include things like material costs, installation fees, supervision fees, proportionate line charges, and registration fees. These charges are considered part of the main service of transmitting electricity. Under the GST law, these charges are exempt from tax according to Entry No. 25A of Notification No. 12/2017 dated 28.06.2017 (as updated by Notification No. 8/2024-CTR dated 08.10.2024). This tax exemption is valid from October 10, 2024, onwards.