2024 (7) TMI 154 - AAR - GST

GVSCCL's treated sewerage water exempt from GST as purified water under Notification 02/2017

In Re: M/s. Greater Visakhapatnam Smart City Corporation Limited

The AAR, Andhra Pradesh ruled on GST liability for sewerage water treated and supplied by GVSCCL to industries. The authority determined that treated ... Levy of GST - Sewerage water treated by GVSCCL and supply of Treated Water to various industries by GVSCCL - forward supply - rate of GST - HELD THAT:- It is found that ‘water’ is covered under Chapter heading 2201 of GST Tariff. It is also found that there are two schedule entries for ‘water’ under Chapter heading 2201 under the CGST Act. The first entry no. 99 of the Notification No. 02/2017 Central Tax (Rate), Dt. 28-06-2017 which is an exemption notification. The second is Entry No. 24 of the Notification No. 01/2017-Central Tax (Rate) dt. 28-06-2017. Drinking Water packed in 20 liters bottles' are liable to tax 12% and the *Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar on other sweetening matter nor flavored are taxable and liable lo tax @ 18% GST. In the subject case, the water supplied by the applicant to GVMC is obtained after the treatment to sewage water as submitted by the applicant and the said water is not potable. Hence Entry no. 46 B which pertains to drinking water only, is not applicable to the impugned product. The impugned goods, called as “Sewerage Treated Water', is purified water - rate of tax NIL as per Notification No. 02/2017-C.T. (R) dated 28.06.2017 Subject from amended time to time. Issues Involved:1. Applicability of GST on the sewerage water treated by GVSCCL and supply of treated water to various industries.2. Rate of tax applicable if GST is applicable.Issue-wise Detailed Analysis:1. Applicability of GST on the Sewerage Water Treated by GVSCCL and Supply of Treated Water to Various Industries:The applicant, M/s. Greater Visakhapatnam Smart City Corporation Limited (GVSCCL), is a limited company incorporated under the Companies Act, 2013, with the state and the urban local body (GVMC) as promoters. GVMC is a 'local authority' responsible for providing sewage management services under Article 243W of the Constitution of India. GVMC has entered into agreements with Hindustan Petroleum Corporation Limited (HPCL) for the supply of recycled (treated) water while discharging its duties under the Constitution.The applicant sought an advance ruling on whether GST is applicable on the sewerage water treated by GVSCCL and supplied to various industries. The applicant argued that the treated sewerage water supplied to HPCL should be exempt from tax under Notification No. 02/2017-Central Tax (Rate), which exempts 'water other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed containers.'The authority examined the entries under Chapter heading 2201 of GST Tariff. Entry No. 99 of Notification No. 02/2017-Central Tax (Rate) exempts certain types of water from tax, while Entry No. 24 of Notification No. 01/2017-Central Tax (Rate) imposes a tax on other types of water, including natural or artificial mineral waters and aerated waters not containing added sugar or other sweetening matter nor flavored.The authority concluded that the treated water supplied by GVSCCL to HPCL is not potable and does not fall under the category of 'drinking water packed in 20-liter bottles' (Entry No. 46B). Instead, it falls under the broader category of 'waters' mentioned in Entry No. 24, which includes various types of waters subject to tax.2. Rate of Tax Applicable:The authority ruled that the treated water supplied by GVSCCL, referred to as 'Sewerage Treated Water,' is classified as purified water. Therefore, it falls under Sr. No. 99 of Notification No. 02/2017-Central Tax (Rate), which exempts it from GST.Ruling:1. Question: Whether GST applicable on the Sewerage water treated by GVSCCL and supply of Treated Water to various industries by GVSCCLRs.- Answer: The impugned goods, i.e., water, subject to the specification and utility submitted by the taxpayer, fall under Sr. No. 99 of Notification No. 02/2017-C.T. (R) dated 28.06.2017.2. Question: If yes, the rate of Tax applicableRs.- Answer: The rate of tax is NIL as per Notification No. 02/2017-C.T. (R) dated 28.06.2017, subject to amendments from time to time.