In a significant update for power consumers in Uttar Pradesh, the U.P. Power Corporation Limited (UPPCL) has announced new guidelines clarifying the GST applicability on a range of power billing system services. This follows recent directives from the Union Finance Ministry and brings relief by exempting 17 specific power-related services from GST.
Key GST-Exempt Services
The exempted services include:
- Charges for disconnection and reconnection.
- Processing fees for load changes and connection modifications.
- Meter testing and replacement.
- Installation and removal charges for temporary connections.
- Service line charges covering labour and overhead costs.
Additionally, services such as interest on security deposits, cheque dishonour charges, theft charges (assessment), and one-time settlement (OTS) registration will remain GST-exempt.
Background and Implementation
Previously, these services attracted an 18% GST following a 2020 central notification. However, a recent notification from the Centre, effective October 10, 2024, has revoked GST on 18 electricity-related services, aligning with broader consumer relief measures.
Continued GST Applicability
The guidelines specify that the deposit service will continue to attract GST at 18%, unchanged from earlier regulations.
Reverse Charge Mechanism Highlight
The notification also addresses a specific provision concerning "service by way of renting of any property other than residential dwelling to a registered person," stipulating that GST for this service will be applicable under the reverse charge mechanism (RCM). Under RCM, the recipient of the service, not the supplier, is responsible for paying the GST to the government.
These changes are expected to reduce the financial burden on consumers and provide greater clarity regarding GST on power-related services in Uttar Pradesh.
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