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Gujarat High Court Strikes down Para 4 of Circular 34/8/2018-GST dated 01.03.2018

Shanti Prime Publication Pvt. Ltd.
Composite Supply — In  the instant  case validity of Para 4 of Circular No.34/8/2018-GST dated 01.03.2018 was challenged.
Held that—“Meaning of "transmission and distribution of electricity" does not change, either for the negative list regime or the GST regime. Services which stood included within the ambit of transmission and distribution of electricity during the pre-negative list regime cannot now be sought be excluded by merely issuing a clarificatory circular 34/8/2018-GST, that too, with retrospective effect. Services provided by the petitioner are in the nature of composite supply and, therefore, in view of the provisions of clause (a) of section 8 of the CGST Act, the tax liability thereof has to be determined by treating such composite same as a supply of the principal supply of transmission and distribution of electricity. Consequently, if the principal supply of transmission and distribution of electricity is exempt from levy of service tax, the tax liability of the related services shall be determined accordingly.Paragraph 4 (1) of the impugned Circular No. 34/8/2018-GST dated 1.3.2018 is hereby struck down as being ultra vires the provisions of section 8 of the Central Goods and Services Tax Act, 2017 as well as Notification No. 12/2017- CT (R) serial no. 25 - summons dated 28.3.2018 is set aside - respondents shall drop the proceedings under the Finance Act, 1994 as well as under the CGST/SGST Acts sought to be initiated by virtue of the impugned summons to the extent the same is based upon item No. 4 (1) of the impugned circular dated 1st March, 2018. — Torrent Power Ltd. Vs. Union of India [2018] 7 TAXLOK.COM 074 (Gujarat)