SERVICE TAX ON ELECTRICITY METER RENT

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 July 2010 My company is in the business of distribution of Electricity to all category of consumers through Energy recording Meter. The consumers is billed by our company on energy charges so recorded in the energy meter so installed by the company, Meter Rent,other alied services like fuse call etc if any as per the prescribed rate of Regulatory commission.
Now Service Tax authority claimed to my company as service Tax on Meter rent collected from consumers,other alied services like fuse call etc so collected from consumers for the last five years.
Please advice whether the claim of service tax authority is correct. If correct than at what section. If not correct than in what section & any case law in this context.
This is very very very urgent,please advice for proper reply.

The full fact is that Company realised Electricity Meter Rent from its consumers through bill along with the cost of energy so consumed. The meter rent so collected from consumer is as per rate fixed by the regulatory commission. The meter rent is part of ARR( Actual Revenue Requirment), but normally company treat it as a non-regulatory income.
Electricity Meters are the assets of the company.Company did not collect/charge any capital cost on this assets from consumers, but to realised rent for use of the same.
Company did not collect any service Tax from consumers for sale of electricity & Meter Rent.
Please advice whether Meter rent is under perview of service tax?.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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09 July 2010 It is difficult to answer to such queries in the absence of full facts and examination.

However, it appears that the department is trying to tax you under the category of "Supply of Tangible Goods for Use".

You need to seek expert opinion on this issue.

Querist : Anonymous

Querist : Anonymous (Querist)

10 July 2010 The full fact is that Company realised Electricity Meter Rent from its consumers through bill along with the cost of energy so consumed. The meter rent so collected from consumer is as per rate fixed by the regulatory commission. The meter rent is part of ARR( Actual Revenue Requirment), but normally company treat it as a non-regulatory income.
Electricity Meters are the assets of the company.Company did not collect/charge any capital cost on this assets from consumers, but to realised rent for use of the same.
Company did not collect any service Tax from consumers for sale of electricity & Meter Rent.
Please advice whether Meter rent is under perview of service tax?.