The Maharashtra Authority of Advance Ruling (AAR) has ruled that 18% GST is payable on Shifting/Height raising of Transmission Towers/Lines through a contractor on the request of the Dedicated Consumers such as railways, National Highway Authority of India etc. on receipt of payment of consideration in the form of adjustable deposit.
The bench of D. P. Gojamgunde and Priya Jadhav has observed that the Shifting/Height raising of Transmission Towers/Lines, belonging to Maharashtra State Electricity Transmission Company Limited (MSETCL) through a contractor on the request of the Dedicated Consumers such as railways, National Highway Authority of India etc. on receipt of payment of consideration in the form of adjustable deposit is covered under the services of agreeing to do an act for a consideration and would be classifiable under Heading 999792 and chargeable to 18% GST.
The applicant, Maharashtra State Electricity Transmission Company Limited (MSETCL) is a leading state transmission utility in the country. MSETCL owns and operates largest Electricity Transmission System in the state. The Company is a wholly owned corporate entity of Maharashtra Government incorporated on May 31, 2005 after restructuring and trifurcation of the erstwhile Maharashtra State Electricity Board.
The concerned Dedicated Consumers for their project works like Construction/ Widening of Highways, laying of Railway Networks. etc.; approach the MSETCL for shifting of transmission towers/ lines. As transmission tower lines that belongs to MSETCL, the ORC Consumer for their project work approach the MSETCL for shifting of Transmission Tower Lines that belongs to MSETCL.
For example, NHAI approaches the MSETCL for shifting/height raising of the existing Transmission Lines/ towers or shifting of Transmission Lines/Towers towards widening/construction of roads. Consideration from the recipient of services. The respective ORC Consumer make remittance (Deposit) of cost of shifting diversion along with supervision charges to MSETCL.
The applicant sought the advance ruling on the issue whether the works undertaken by MSETCL can be termed as “supply” to the Dedicated Consumers.
The AAR held that the applicant does not fullfill the three conditions.
From the sample contract between the applicant and the recipient, it is seen that the entire work has to be carried out by the applicant. In one other contract, it is seen that the option was given to the consumer to decide whether the service should be on the basis of 15% Supervision charge basis or all work to be executed by MSETCL on 100% deposit basis and the approval is given for the work to be executed by MSETCL on 100% basis. Such contracts are ‘cost plus contracts’. All the responsibility for completion of the work satisfactory lies on the applicant. They are not acting as agents of the recipient of the service.
Secondly, the second condition that the applicant shall not hold any title to the goods or services provided by the sub-contractor also does not get satisfied as the applicant holds the title of all the goods and services supplied by the sub-contractor. In fact, the constructed asset is capitalized in the books of the applicant.
Thirdly, such goods or services should not be used by the agent for his own interest. In the instant case, the constructed sub stations, transmission lines etc., are used by the applicant for providing their services of transmission of electricity.
The AAR found that the applicant does not fulfill the conditions laid down for a pure agent and therefore, the applicant would not be treated as a pure agent in these types of transactions.
Ruling Details
Applicant’s Name: M/s. Maharashtra State Electricity Transmission Company Limited
Ruling Date: 30/04/2025
Read More: Absence Of DIN In Summons Issued By State Officers Doesn’t Invalidate Them: Gujarat High Court
![ED Can’t Issue Summons To Any Advocate Without Prior Approval Of Director [READ CIRCULAR]](https://www.jurishour.in/wp-content/uploads/2025/06/ed-summons-advocate.webp)