Page 35 - DTPA Journal Aug 18

DTPA - J | 2017-18 | Volume 3 | August 2018

energy (HSN code no. 2716 0000). (e) the tax payable under the provisions of sub-sections
(3) and (4) of section 7 of the Union Territory Goods
ANALYSIS
and Services Tax Act
Since the GST Act does not exclude 'electrical energy'
Section 49 (5):
from the definition of goods and/or services, it means
that supply of electrical energy is within the ambit of The amount of input tax credit available in the electronic
GST Act. Inclusion of 'electrical energy' in notification credit ledger of the registered person on account of––
no. 2/2017-CT(R) dated 28.06.2018 means that (f) the State tax or Union territory tax shall not be utilised
'electrical energy' is treated as an exempted goods. It
towards payment of central tax.
may be mentioned here that distribution and
transmission of electrical energy by a Distribution and ANALYSIS:
Transmission Company has been exempted vide entry According to Section 2(62) 'Input Tax' includes State tax
no. 25 of notification no. 12/2017-CT(R) dated or UT tax charged on any supply including taxes
28.06.2018. Under the GST Act, both the Central payable under section 9(3) and 9(4) of the State Tax Act
Government and the State Government has power to or under section 7(3) and 7(4) of the UT Tax Act. What is
levy taxes on sale and purchase of goods. When both the purpose of such inclusion, when clause (f) of section
the Governments have the power to levy tax on 49(5) prohibits the utilization of the State tax or UT tax
electricity, then entry 53 of List II-State List should have towards payment of Central tax. We all know that state
been omitted. List II refers to those matters in relation to tax or UT tax cannot be utilized for payment of central
which the State Government has exclusive powers to tax and vice versa The Act is not clear and creates
deal with. Further how can the State Government levy ambiguity.
tax twice on the same transaction, first under Entry 53 of
Provision:
List II of the Seventh Schedule of the Constitution and
again under the West Bengal GST Act, 2017. Section 1:
In the case of commercial establishments like malls or (2) The GST Act extends to the whole of India except the
office buildings, the electricity company sells electricity State of Jammu and Kashmir.
to the owners or operators of such commercial (56) “India” means the territory of India as referred to in
establishments on principal to principal basis and not on article 1 of the Constitution, its territorial waters, seabed
principal to agent basis. It means that owners or and sub-soil underlying such waters, continental shelf,
operators are selling electricity to the occupants of the exclusive economic zone or any other maritime zone as
mall owner, on their own account and not distributing referred to in the Territorial Waters, Continental Shelf,
electricity on behalf of any other person, irrespective of Exclusive Economic Zone and other Maritime Zones
the fact whether or not,they have the right to do so. Now Act, 1976, and the air space above its territory and
since electricity has been exempted vide above territorial waters;
notification, tax cannot be collected on the same.
(79) “non-taxable territory” means the territory which is
Section 32(2) of the CGST Act prohibits registered
outside the taxable territory;
persons from collecting tax on exempted goods and
services. As such any person collecting tax on supply of (109) “taxable territory” means the territory to which the
electricity is violating the provisions of section 32(2) of provisions of this Act apply;
the Act. Any aggrieved person may seek refund of the Section 7(2) of the IGST Act:
tax wrongfully collected from him.
Supply of goods imported into the territory of India, till
PROVISION: they cross the customs frontiers of India, shall be
Provision of Section 2 (62) treated to be a supply of goods in the course of inter-
State trade or commerce.
“input tax” in relation to a registered person, means the
central tax, State tax, integrated tax or Union territory ANALYSIS
tax charged on any supply of goods or services or both According to the above provisions, if an importer
made to him and includes— supplies the goods after the goods enter the territorial
(d) the tax payable under the provisions of sub-sections waters of India but before they cross the customs
(3) and (4) of section 9 of the respective State Goods frontier of India, he shall be liable to charge IGST on
and Services Tax Act; or such supply. After paying tax to the supplier, when the

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