GST exemption for purified drinking water denied where the supply fell within the excluded category and container wording was read separately.

Purified drinking water supplied to the public in empty unsealed cans was treated as outside GST exemption under Entry No. 99 of Notification No. 2/2017-Central Tax (Rate). The entry exempts water but expressly excludes purified water and water sold in sealed containers; the clarification relied on the same distinction and stated that public drinking water is exempt only when not supplied in sealed containers. Reading the wording in statutory context, the reference to sealed containers was treated as an additional exclusion rather than a limitation on the earlier exclusions. The supply was therefore held to be taxable.

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Issues: Whether supply of purified drinking water to the public in empty unsealed cans is exempt from GST under Entry No. 99 of Notification No. 2/2017-Central Tax (Rate) dated 28th June 2017.

Analysis: Entry No. 99 exempts water, but specifically excludes aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized water and water sold in sealed container. The clarificatory circular reiterated that drinking water supplied for public purposes is exempt only if it is not supplied in a sealed container. On the facts, the supply was of purified water, after treatment and removal of impurities, and therefore fell within the excluded category of purified water. The wording of the entry was read in its statutory context, and the conjunction used before the phrase relating to sealed containers was treated as introducing an additional exclusion rather than qualifying all preceding excluded categories.

Conclusion: Supply of purified drinking water to the public in empty unsealed cans is not exempt from GST.

Ratio Decidendi: Where an exemption entry expressly excludes a commodity by description, the exclusion operates according to the statutory context, and a later phrase concerning sealed containers may create an additional exclusion rather than limit the earlier exclusions.

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