The Tamil Nadu-based Authority for Advance Rulings (AAR) has held that only distribution and transmission segments of the electricity sector are exempt from goods and services tax (GST) and any transaction between the two utilities could come under the indirect tax depending on its nature.
The issue was applicability of GST to the inter-company transactions between applicant Tamil Nadu Generation and Distribution Corporation (TANGEDCO) and Tamil Nadu Transmission Corporation (TANTRANSCO), both subsidiaries of Tamil Nadu Electricity Board.
The AAR held that GST is applicable on these supplies from TANGEDCO to TANTRANSCO, operation and maintenance materials used in the regular day-to-day functioning, transfer of assets and movement, and deployment of employees, said Harpreet Singh, partner at KPMG.
