Maharashtra AAR: 18% GST Applicable on Shifting or Height Raising of Transmission Towers/Lines by MSETCL
Pranav B Prem
The Maharashtra Authority for Advance Ruling (AAR) has held that 18% GST is applicable on the activity of shifting or height raising of transmission towers and lines undertaken by Maharashtra State Electricity Transmission Company Limited (MSETCL) at the request of dedicated consumers such as the Railways, National Highway Authority of India (NHAI), and other project authorities.
The application was filed by MSETCL, a wholly owned corporate entity of the Government of Maharashtra engaged in transmission of electricity across the state. In the course of infrastructure projects like construction and widening of highways or laying of railway networks, dedicated consumers often request shifting or height raising of existing transmission towers or lines owned by MSETCL. For carrying out such works, the consumers deposit the cost of shifting/diversion along with supervision charges, which are treated as an adjustable deposit by MSETCL.
MSETCL approached the AAR seeking a ruling on whether such activities could be considered as “supply” under GST when carried out on behalf of dedicated consumers.
The bench comprising D.P. Gojamgunde and Priya Jadhav observed that the shifting/height raising of transmission lines amounts to a service of “agreeing to do an act for consideration,” squarely falling under Heading 999792 (“agreeing to do an act”) and chargeable at 18% GST. The Authority noted that the consideration received in the form of deposits is directly linked to the works executed, making it a taxable supply.
The AAR also examined whether MSETCL could be treated as a “pure agent” in such cases, which would have exempted it from GST liability. Relying on the contracts produced, the Authority found that MSETCL did not satisfy the conditions for being considered a pure agent. It noted that:
The entire work of shifting/diversion is carried out by MSETCL itself and not merely supervised on behalf of the consumer.
The company retains title over the goods and services provided by subcontractors, and the constructed assets are capitalized in MSETCL’s books of accounts.
The constructed assets such as substations and transmission lines are ultimately used by MSETCL in providing its transmission services.
The AAR held that these factors indicated that MSETCL was not merely facilitating services but was itself the service provider. Therefore, the exemption available to pure agents could not be claimed.
The Maharashtra AAR ruled that shifting or height raising of transmission towers and lines for dedicated consumers like Railways or NHAI is a taxable supply of service under Heading 999792 and is liable to 18% GST. The Authority also clarified that MSETCL cannot be treated as a pure agent in such transactions, as the works are executed and capitalized by the company itself.
Applicant’s Name: M/s. Maharashtra State Electricity Transmission Company Limited
