Relief for Power Consumers in UP: No GST on Disconnection and 16 Other Power Services
In a significant change for power consumers in Uttar Pradesh, U.P. Power Corporation Limited (UPPCL) has introduced new guidelines that align with the Union finance ministry’s directives to exempt 17 specific power services from Goods and Services Tax (GST). These services, which were previously subject to 18% GST since 2020, are now GST-free, providing relief for residents and businesses alike. Here’s what the new changes entail:
- GST-Exempt Power Services: Key services like disconnection and reconnection fees, meter testing, replacement services, installation and removal for temporary connections, and charges for load changes and connection modifications will no longer incur GST charges. Other GST-free services include service line charges (covering labor and overhead costs), cheque dishonor charges, and theft assessment fees.
- GST Continues on Deposit Services: Services related to security deposit interest will remain GST-exempt, but deposit services will continue with a 18% GST rate, as previously applied.
- Reverse Charge Mechanism for Property Rentals: A unique update involves the reverse charge mechanism (RCM) for “service by way of renting of any property other than residential dwelling to a registered person,” where the GST responsibility is transferred to the recipient of the service rather than the provider. This provision ensures compliance with RCM in applicable rental transactions.
- Notification Effective from October 10: The GST exemption on these 17 services officially took effect on October 10, delivering immediate benefits to power consumers in the state.
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