TaxTMI 
TaxTMI 
2021 (8) TMI 188
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.... M/s. Kasipalayam Common Effluent Treatment Plant Private Limited No. 250/1, Uthukuli Road, S. Periyapalayam, Tiruppur. 641 607 (hereinafter called the Applicant) are registered under GST with GSTIN 33AABCK3060C IZ8. The applicant has sought Advance Ruling on: (1) Whether the classification of the supply of outputs as sale of goods is correct. (2) Whether classification of water sold as Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) under Heading 2201 is correct. (3) Whether classification of effluent purchased from dyeing as other wastes from chemical or allied industries (3825 69 00) is correct. (4) Whether the method of arriving value for effluent using the net realization price method is correct as there are no comparable products and cost cannot be worked out. The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are an efflu....
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....of the Treated Brine Solution dated 13.02.2021; • Analytical Report of the Recovered Water dated 13.02.2021 • Kasipalayam CETP Salt Analysis Report dated 12.02.2021 • Kasipalayam CETP Salt Analysis Report dated 13.02.2021 • Process Flow Diagram of 4.4 MLD Capacity of Kasipalayam CETP- 100% Capacity Water Balance; • Process Description of Kasipalayam CETP • Draft Contract for Sale and Disposal of Dyeing Effluent; • Balance Sheet as on 31.03.2020 3.3 The applicant vide their e-mail dated 22.04.2021 furnished their Letter dated April 17, 2021 addressed to The Assistant Commissioner (ST), Chennimalai Assessment Circle. In the said letter, they had inter-alia stated that 01. By following the below mentioned method of process i.e Zero Liquid Discharge (Hereinafter referred as ZLD), their plant effluent treatment process will not pollute the Environment and also Noyyal river is flowing with maximum Eco Restoration. 02. Suppose they follow the traditional method i.e. before ZLD they could not save their Ecology Environment and also cannot control the Environmental pollution. ....
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....TURER compared with present stage 4.1 The State Jurisdictional authority who has administrative control over the applicant has stated that there is no show cause Notice/ Issue pending adjudication in this office on this subject matter but the applicant has been issued a show cause Notice from the Central Tax Authorities and further offered the following comments: 1) Whether the classification of the supply of out puts as sale of goods is correct? The principal Supply done by the applicant is supply of way of treatment of effluents by a Common Effluent treatment plant (SAC-9994). Hence the Classification of the supply of output as sale of goods is not correct. Rate of GST on Service by way of treatment of effluent is 12% (CGST 6%) but Salt (HSN 2501) and water. (HSN 2201) are NIL rated. The classification as sale of goods may affect the revenue to the Government Exchequer. 2) Whether classification of water sold as water (other than aerated mineral, purified, distilled, medicinal, tonic battery, de-mineralized and water sold in sealed container) under heading 2201 is correct? Water discharged by the applicant is partly de- mineralized in nature....
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....tput products from THE SOUTH INDIA TEXTILE RESEARCH ASSOCIATION - TEXTILE TESTING AND SERVICE CENTRE, Tirupur -641602, which is submitted overleaf. • The Nature of work on Effluent treatment and the Concept as well as difference between Integrated Effluent Treatment Plant and Common Effluent Treatment Plant were explained by the experts in the Plant. • The test report and the explanation of the experts during verification revealed that the components of the effluents were extracted separately and sent back to the dyeing units as reverse process. Again, during dyeing, the components are mixed and effluent is generated as liquid waste. Raw effluent has chlorides, sulphates majorly which is treated and extracted to the components viz. R.O. water [HSN:2201], mixed salt (HSN: 3825 majority Sodium Sulphate with less Sodium Chloride and other salts), Glauber salt (HSN: 3825 content of sodium sulphate) and Brine solutions liquid (HSN: 38256900). • In this reclassification, the plant may claim ITC on the Effluent to be treated. The applicant has wrongly classified the mixed salt with GST exempted category. But Sodium Chloride content in that common sal....
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....r Cubic meter (1000 liters). By adopting such rate, the applicant has projected Net payment of GST Rs. 618,597/- after adjustment of Input GST against the originally paid net GST Rs. 447728/- which is Rs. 170869/- more than the actual revenue collected in February 2021. But on the other hand, in case of reclassification of the Plant as Manufacturer, the Member Dyeing Units may claim additional refund claim amounting from Rs. 22,53,680/ to (as estimated with the figures reported in February 2021) which is presently available in Credit Ledger of the Member Units but could not be claimed as Refund against Inverted Duty Structure. This kind of refund will affect the State Exchequer periodically but accumulation of credit without any monetary benefit may affect the survival of the Member dyeing Units severely which may result in either affecting Foreign Exchange inflow or drastically increasing Water Pollution in Noyyal basin and Cauvery Delta. 6.2 The Jurisdictional Officer has furnished the following along with the report: 1. Test report of the output products, dated:30.3.2021 2. Letter received from the applicant, Kasipalayam CETP, dated: 17.4.2021 3. Re....
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....ication of effluent purchased by them. Section 95 (a) of CGST and TNGST Act defines 'advance ruling' as (a) "advance ruling" means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; From the above, it is evident that an applicant can seek an Advance Ruling only in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103(1) of the GST Act, the ruling is binding only on the applicant and the concerned officer or the jurisdictional officer of the applicant. In the case at hand, at Q.No.3, the applicant has sought ruling on the classification of the effluent purchased by them and at Q.No. 4 the ruling is sought on the method of arriving value for purchase of effluent. These questions are raised as recipient of the goods and not supplier of such goods. Accordingly, this questions are not liable for admission, the fact of which was already stated during the Hea....
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....s after delivery and shall treat the effluent as per the statutory regulations The state jurisdiction officer alongwith the verification report has furnished the details of budgeted sales & Raw Effluent Purchase details for the months of February 2021 as below: FEBRUARY '2021 MONTH - BUDGETED SALES & RAW EFFLUENT PURCHASE DETAILS No. PARTICULARS RAW WATER READING (IN M3) Raw Water Purchase cost @ 10 per M3 Recovered Water (in M3) Cost @125 per Brine Solution (in M3) Cost 18% M3 Glauber Salt (in Kgs) Salt @ 22/per kg Forced Mixed Salt (in Kgs) Mixed Salt Rate @ 24/ per Kg 1. Amitham Bleaching 803 8030 328 41000 0 0 0 0 2. Dhaoashree Bleaching and Dyeing 4198 41980 4700 587500 185 3330 37720 719840 13080 313920 3. High Power Process 7479 74790 2950 368750 99 1782 42200 928400 14520 348480 4. Friends Colours 4011 40110 5882 735250 424 7632 95000 20900....
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....e process description that three stage RO system is designed to get overall recovery 80% of product water by removal of dissolved inorganic salts. All the three stages are loaded with Sea Water (SW) membranes. 80% of water is restored. From the Analytical report of the recovered water dated 13.02.2021 furnished by the applicant it is seen that the TDS is 216 and it contains chlorides, Sulphates, Bicarbonates and the pH is 6.50. Further the report furnished by The South India Textile Research Association (SITRA) Textile Testing and Service Centre, test report No. V2000610 dated 30.03.2021 of Sample No.: V2000610-3, gives the report of RO WATER (Industrial use)wherein it is seen that the pH is 6.59, TDS is 118 mg/l and contains chlorides, sulphates, Bicarbonates, etc. It is further stated that the reusable water is dispatched to Member units(buyers) through pipe line conveyance system for their industrial process utilization. 9.2 From the above, it is clear that the recovered, reusable water obtained by the process of Reverse Osmosis is sold for Industrial process utilization. The water is partly de-mineralized in nature. Therefore while the CTH applicable is 2201 as stated by the....