Sunday, December 26, 2010

Service Tax on renting of electricity meters

The Service Department has issued circular regarding a doubt on whether the renting on electricity meter installed on consumers premises by a service provider, is covered by the exemption under notification no. 11/2010 dated 27th February, 2010 and/or  32/2010 dated 22nd June, 2010.

On examination of the matter, the Department is of the opinion that the electricity meter is installed to determine the amount of electricity consumed by the consumer and has direct and close nexus with the transmission and distribution of electricity. Hence the same is covered under the exemption extended by the relevant notifications.