GST on Shifting Utility Infrastructure: Rajasthan AAR Ruling
The Authority for Advance Ruling decided that shifting power lines for highway projects is not a taxable supply of goods under GST.
- Ruling
- ADVANCE RULING NO. RAJ/AAR/2019-20/09 dated 28.05.2019
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- NHAI asked if shifting power lines constitutes a taxable asset transfer.
- The Authority ruled that these lines are immovable property, not goods.
- No GST is payable because the activity is not a supply.
In short
The National Highway Authority of India (NHAI) asked the Rajasthan Authority for Advance Ruling (AAR) if moving power lines for road projects counts as a taxable supply under the Goods and Services Tax (GST) law. Because the power lines are fixed to the earth, the authority decided they are immovable property rather than goods. Since the activity does not meet the definition of a supply, it falls outside the scope of GST.
What has changed
How it worked before
Businesses were uncertain whether relocating utility infrastructure like power lines or pipelines during construction projects triggered a GST liability on the transfer of assets.
What has changed
The ruling clarifies that shifting utility infrastructure that results in immovable property is not a supply of goods. This means businesses do not need to pay GST on the value of the infrastructure itself when it is relocated for public works.
Who this affects
Construction companies, infrastructure developers, and utility providers involved in shifting fixed assets for government or private projects.
An example
A private road developer needs to move water pipelines owned by a local municipal body to widen a highway. The developer pays for the relocation but the pipes remain the property of the municipality. Based on this ruling, the developer would argue that the relocation is not a taxable supply of goods because the pipes are immovable property and no ownership transfer occurred.
What you should do
This ruling only applies to the specific business that asked the question and its local tax office. If you are in a similar situation, you cannot automatically rely on this decision; you should consult with a tax professional to evaluate your specific contract and project details.
If you do nothing
If you assume this ruling applies to your business and stop paying GST on similar transactions, you risk a tax demand from your local officer. If the officer disagrees with your interpretation, you may face penalties and interest charges for unpaid taxes. Always seek a professional opinion tailored to your specific facts.
The terms explained
- Goods
- Under GST law, this refers to movable property. It does not include money or securities, but it does include things like machinery or inventory.
- Immovable Property
- Assets that are permanently attached to the earth, such as buildings, land, or fixed utility lines, which cannot be moved without significant alteration.
- Supply
- Any form of sale, transfer, or exchange made for a price in the course of business that triggers a GST liability.
The ruling in detail
Authority for Advance Ruling
M/s National Highway Authority of India (Regional Office)
ADVANCE RULING NO. RAJ/AAR/2019-20/09 dated 28.05.2019 · Rajasthan
Questions before the authority
- Whether there is any 'Asset Transfer' involved which is a supply leviable to GST in the work of shifting & raising of transmission lines owned by RVPNL by NHAI in the course of widening, modification & diversification of its highways after completion of this work?
- Without prejudice to the submissions made above, if there is an 'Asset transfer' which is a Supply under GST, then who is liable to pay GST?
- If above GST is to be paid by the Applicant, then the same will be exempt vide Entry 4 of Notification no. 12/2017- Central Tax (rate) dated 28.06.2017?
Facts
The applicant, NHAI, is undertaking the widening and modification of national highways. This process requires the shifting or raising of existing power transmission lines owned by Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPNL) to ensure safe electrical clearances. NHAI bears the cost of this modification work, and the question arises whether this activity constitutes an 'Asset Transfer' that is a taxable supply under GST.
Ruling
| Question | What the authority ruled |
|---|---|
| Whether the activity is an 'Asset Transfer' leviable to GST | No The constructed assets do not qualify as 'goods' under the GST Act |
The Authority ruled that the assets constructed by the applicant do not fall under the category of 'goods' as defined under the GST Act. Consequently, the activity does not constitute a supply, and therefore, no GST is leviable on the transaction.
Reasoning
The Authority reasoned that the power transmission lines constructed by the applicant are immovable property and do not meet the definition of 'goods' under Section 2(52) of the GST Act. Furthermore, it observed that the element of consideration is absent in the transfer of these assets, as the ownership remains with RVPNL. Since the activity does not qualify as a supply under Section 7 of the GST Act, the provisions regarding the transfer of business assets under Schedule II are not applicable.
Provisions relied on
- Section 97(2)(e) of the CGST/SGST Act, 2017
- Section 97(2)(g) of the CGST/SGST Act, 2017
- Section 7 of the GST Act, 2017
- Section 2(52) of the GST Act, 2017
- Section 2(31) of the GST Act, 2017
- Schedule II of the GST Act, 2017
For the practitioner
This ruling provides relief to entities like NHAI by clarifying that the **shifting and raising of utility infrastructure** that results in immovable property does not constitute a taxable supply of goods. It settles that such activities, where no consideration is involved and the asset is not 'goods', are **outside the scope of GST**. Practitioners should note this does not address the taxability of the separate supervision or shut-down services provided by the utility company, which the applicant acknowledged as taxable.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/raj.aar-2019-20_09-nhai.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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