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Applicability of GST — Applicant is involved in electrification work in to the rural and urban areas under the various Government Schemes; it supplies electricity to all the commercial users and noncommercial consumers and recovers charges for supply of electricity along with other non-tariff
Whether applicant is eligible to avail the exemption from the levy of GST under Entry no. 25 of notification 12/2017- Central Tax (Rate) Dated 28/06/2017 bearing description 'Transmission or Distribution of electricity by an electricity transmission or distribution of electricity utility' with respect to the Delay Payment Charges recovered by the applicant from its consumers.
If answer is negative then what will be the applicable rate of tax and HSN/SAC code for Delayed Payment Charges.
Ruling—
In light of Notification No. 02/2017 and 12/2017 dated 28th June 2017 Central Tax(Rate) and corresponding notification issued under MPGST Act, 2017 and Circular No. 34/8/2018-GST. Dated - 01.03.2018 and as per the provision of Section of CGST Act, 2017. The Delayed payment surcharge/ Late Payment Surcharge/ Surcharge on outstanding amount (by whatever name called) cannot be treated as separate service and same shall be included in the value of initial supply to which such charges relate, and the portion of Delayed payment surcharge attributable to exempted supply will be exempted and the portion of Delayed payment surcharge attributable to taxable supply is taxable at the rate on which the corresponding supply is taxed.Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited[2018] 06 TAXLOK.COM 076 (AAR-Madhya Pradesh)