26 November 2012
A company obtains power from the Electricity Board and from the same, connection is provided to the residential quarters of the employees. Every three months, charges are collected from the employees based on the rate charge by the Board after allowing certain number of units as free usage. Whether Service Tax is payable on the electricity charges collected from the employees? Particularly in view of the fact that the electricity is goods and therefore, the above transaction amounts to sale of goods. However, in the e-guide issued by the Department in Para no. 4.11.2, it is clarified in a similar situation of developer that the said transaction will not fall in the negative list i.e. taxable.
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