GST is leviable on the transportation charges Levied by Emco Limited on power grid
Authority for Advance Ruling — Taxability on Transportation Charges – The applicant is engaged in the business of manufacturing and selling various products and solutions as required in Power Transmission and Distribution Sector. The Company has two divisions namely (i) Transformer division and (ii) Project division. The Transformer division manufactures widest range of transformers which are used in the power industry. The Applicant has entered into contracts with Power Grid Corporation of India Limited for supply of Towers and Transmission line Products and services contract. The Applicant, for the purposes of transportation of goods, avails the service of a GTA Who transports the said goods to the location of PGCIL. The Applicant also pays tax under reverse charge on the said services availed from a GTA. The applicant sought an advance ruling as to whether GST is leviable on the transportation charges levied by the Applicant on PGCIL (ii) in case the GST is payable, what would be the rate of GST to be charged on such charges.
Held that:- The Hon’ble Authority for Advance Ruling held that the contract is covered by the definition of works contract. The supply of transportation service is not supply of standalone service but integral component of composite supply in the nature of works contract and liable to pay GST. GST would be liable at 18%.
GST is leviable on the transportation charges Levied by Emco Limited on power grid
Authority for Advance Ruling — Taxability on Transportation Charges – The applicant is engaged in the business of manufacturing and selling various products and solutions as required in Power Transmission and Distribution Sector. The Company has two divisions namely (i) Transformer division and (ii) Project division. The Transformer division manufactures widest range of transformers which are used in the power industry. The Applicant has entered into contracts with Power Grid Corporation of India Limited for supply of Towers and Transmission line Products and services contract. The Applicant, for the purposes of transportation of goods, avails the service of a GTA Who transports the said goods to the location of PGCIL. The Applicant also pays tax under reverse charge on the said services availed from a GTA. The applicant sought an advance ruling as to whether GST is leviable on the transportation charges levied by the Applicant on PGCIL (ii) in case the GST is payable, what would be the rate of GST to be charged on such charges.
Held that:- The Hon’ble Authority for Advance Ruling held that the contract is covered by the definition of works contract. The supply of transportation service is not supply of standalone service but integral component of composite supply in the nature of works contract and liable to pay GST. GST would be liable at 18%.