Whether Tax will be applicable on non tariff Charges or Not ?
Let’s understand the concept with one case study
CASE 14: M/S TP AJMER DISTRIBUTION LTD (AAAR – RAJASTHAN)
Applicant : TPADL (Company) Engaged in the business of distribution of Electricity in Ajmer City.
Question : Company Receives Non – Tariff Charges whether taxable or Not ?
Facts : Company is distributing Electricity to Consumers for that purpose getting Various charges like re – connection charges, Connection Transfer Charges, Duplicate bill Charges (i.e. Non Tariff Charges). Whether these charges are exempted or not ?
Distribution Charges, As per Entry No. 25 of notification no. 12/2017 – CGST (Rate) Dated 28/06/2017 these charges are exempted from GST.
Submission : Ajmer Vidyut Vitran Nigam Ltd Given work of transmission or distribution of electricity to Tata Power Company Ltd for 20 years Tata Power Company Limited Sublet to TPADL Here, distribution and transmission work given Other activities are also part of it hence covered under entry no. 25 Hence exempted
Finding : Non – Tariff charges are not covered under Entry no. 25 hence Taxable.
Other Concerns :
- Security Deposits : It is Refundable hence not considered as consideration hence not taxable.
- Cheque Dishoarded Fees : Treated as supply of service hence taxable.
