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of <h1>'Treated Water' from Sewage Treatment Plant not GST exempt; taxable at 18% under Schedule III.</h1> <h3>In Re: M/s. Rashtriya Chemicals and Fertilizers Limited</h3> In Re: M/s. Rashtriya Chemicals and Fertilizers Limited - 2021 (55) G.S.T.L. 209 (A. A. R. - GST - Mah.) Issues Involved:1. Eligibility of 'Treated Water' obtained from STP for GST exemption under SI. No. 99 of Exemption Notification No. 02/2017.2. Taxability of 'Treated Water' obtained from STP at 18% under SI. No. 24 of Schedule III of Notification No. 01/2017.Issue-Wise Analysis:1. Eligibility of 'Treated Water' for GST Exemption:The applicant, engaged in the manufacture and sale of fertilizers and industrial chemicals, operates a Sewage Treatment Plant (STP) converting sewage water into treated water for industrial use. The applicant sought clarity on whether this treated water is exempt from GST under SI. No. 99 of Exemption Notification No. 02/2017, which exempts 'Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container).'The applicant argued that the treated water should be considered as 'water' under the exemption entry since it is not fit for drinking but suitable for industrial use. The applicant also highlighted that under the Maharashtra VAT Act, water was exempt from VAT, supporting their claim for GST exemption.However, the authority observed that the treated water undergoes significant purification processes, removing bio-waste, grit, undesirable chemicals, biological contaminants, suspended solids, and gases, making it 'purified water.' Since 'purified water' is explicitly excluded from the exemption under SI. No. 99, the authority concluded that the treated water does not qualify for GST exemption.2. Taxability of 'Treated Water' at 18% GST:The applicant also sought clarity on whether the treated water is taxable at 18% under SI. No. 24 of Schedule III of Notification No. 01/2017, which covers 'Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured (other than Drinking water packed in 20 litres bottles).'The authority noted that the treated water, being purified, falls under the category of 'waters' as mentioned in SI. No. 24. The entry includes various types of water, and the treated water, being purified and used for industrial purposes, fits within this classification. Therefore, the treated water is subject to GST at 18%.Conclusion:The authority ruled that the 'Treated Water' obtained from the STP is not eligible for GST exemption under SI. No. 99 of Exemption Notification No. 02/2017 because it is classified as 'purified water.' Instead, it is taxable at 18% under SI. No. 24 of Schedule III of Notification No. 01/2017.Order:1. 'Treated Water' obtained from STP is not eligible for exemption from GST under SI. No. 99 of Exemption Notification No. 02/2017.2. 'Treated Water' obtained from STP is taxable at 18% under SI. No. 24 of Schedule III of Notification No. 01/2017.
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