The Rajasthan High Court (HC) has quashed a clarification issued by the Union government that had allowed the authorities to impose goods and services tax (GST) on certain portions of power supply.
Power distribution services draw zero GST rate since they fall under the negative list of services released by the Union government in 2017.
However, the Central Board of Indirect Taxes and Customs (CBIC) came out with a circular in 2018 imposing GST on various activities, such as application fee for releasing electricity connection, rental charges against metering equipment, testing fee for meters, capacitors, and duplicate bill charges. The circular was issued after the GST Council made recommendations to that effect, said Harpreet Singh, partner-indirect taxes, KPMG.
