PANAJI
The Goa Electricity Department (GED) has reportedly incurred a financial loss of over Rs 21 crore owing to the non-collection of Goods and Services Tax (GST) and ineligible input tax credit (ITC) claims on electricity meter rent despite being a taxable service.
As per the Electricity Act, 2003, the GED is a deemed distribution licensee under Section 14, authorised to distribute electricity in the State.
In this capacity, GED functions not merely as a government department but as a distribution licensee, similar to other power utilities operating under regulatory oversight and has been paying an annual licence fee.
CAG noted that for the financial year 2022–23 alone, GED paid a licence fee of Rs 3.16 crore.
Despite this, the department reportedly treated meter rent collected from consumers as a non-taxable government service, leading to non-levy and non-collection of GST.
“Audit observed that the department had charged meter rent of Rs 58.60 crore from its consumers during July 2017 to March 2023. However, GST at the rate of 18 per cent amounting to Rs 10.55 crore was not charged on meter rent despite meter rent being a taxable service,” CAG said.
It further said that the GST collected on such meter rent would have enabled the department to avail ITC on the GST paid at the time of procurement of meters. “The department had paid GST amounting to Rs 10.63 crore on purchase of meters during the above period. Thus, non-collection of GST of Rs 10.55 crore on meter rent from consumers resulted in non-payment of GST of Rs 10.55 crore and non-availing of ITC on meter purchase resulted in loss of Rs 10.63 crore to the department,” it said.
CAG said that the observations were raised before the State power Secretary and Commissioner of State Taxes (CST) in April 2023. Despite reminders to the Secretary in June and October 2023, the reply was awaited till January 2025.
“However, CST in August 2023 replied that as per notification dated 30 June 2017, the services provided by the State Government are exempted from GST barring few specified services and services provided by the Department to unregistered entities who are not liable to pay GST is also exempted from GST. Keeping in view, GED is not liable to pay GST @ 18 per cent on services provided,” CAG said while stating that the reply is “not tenable” as the department is not a service provided by the government, but the services provided in the capacity of a distribution licensee.
