2021 (8) TMI 534

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....ectively) by M/s. Vijayavahini Charitable Foundation (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: 3.1 The applicant, M/s. Vijayavahini Charitable Foundation (VCF), bearing GST registration number 37AAFCV9493C1ZW, is a Sec. 8 Company registered under the Companies Act, 2013, which undertakes, encourages, supports and aids charitable activities in relation to poor in the areas of medical relief, education, health, vocation, livelihood etc. It is also exempted under section 12A of Income Tax Act, 1961. VCF has proposed to undertake the activity of providing pure and safe Drinking Water at an affordable cost for the under privileged people in villages in the state of Andhra Pradesh where clean and potable drinking water is not available. 3.2 The applicant proposes to draw water from the local water source (Open Well/Bore well/ground water) and treats the water through reverse osmosis (RO) process and provides this purified drinking water to the general public in the areas of Krishna District, Andhra Pradesh at affordable prices on pilot basis. The detailed process is given below: • V....

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.... 1 Estimated Capital cost (For 10 plants) 2.76 Crores 2 No. plants estimated to be set up 10 Nos 3 Estimated Operational costs 1.73 Crores 4 Estimated Revenue 0.72 Crores With the above background, the applicant approached this Authority, seeking clarification on the taxability of the supplies made by them. 4. Question raised before the authority: Whether supply of drinking water to general public in unpacked/unsealed manner through dispensers/mobile tankers by a charitable organisation at a concessional rate is covered under exemption of GST as per SI.No 99 of Notification 02/2017-Central tax (Rate) dated 28/06/2017? SI. No.99. "Intra state supplies of Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralized and water sold in sealed container]" On Verification of basic information of the applicant, it is observed that the applicant falls under State jurisdiction, i.e. Assistant Commissioner (ST), Benz Circle, Vijayawada-II Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as p....

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....1/2017 (Central Tax) (Rate) dated 28.06.2017 further amended by Notification-6/2018 (Central Tax) (Rate) dated 25th January 2018. The schedule for GST rates is given as follows: Schedule III - 9% SI.No. Chapter / Heading / Subheading/ Tariff item Description of Goods 24 2201 Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured. Schedule II - 6% SI.No. Chapter / Heading / Subheading/ Tariff item Description of Goods 46B 2201 Drinking water packed in 20 litre bottles 5.7 Thus, though "water" is mentioned at SI. No 24 of Schedule III (9% + 9%) and "Drinking water packed in 20 litre bottles" is mentioned at SI. No 46B of Schedule II (6%+6%), the taxability of the supplies come into picture only when it is supplied in sealed containers to customers. The applicant in this case is supplying drinking water in unsealed container to general public and the consideration is just an amount to cover operational cost and is not meant to derive any profits. Hence it is opined that VCF is not required to pay GST as per SI. No 99 of the Exemption Notification No. 2/2....

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.... tankers, to general public is exempt. The relevant excerpts of the circular are reproduced as below: "6.1 Applicability of GST on supply of safe drinking water for public purpose: Representations have been received seeking clarification regarding applicability of GST on supply of safe drinking water for public purpose. 6.2 Attention is drawn to the entry at S. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, by virtue of which water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] falling under HS code 2201 attracts NIL rate of GST. 6.3 Accordingly, supply of water, other than those excluded from S. No. 99 of notification No. 2/2017- Central Tax (Rate) dated 28.06.2017, would attract GST at "NIL" rate. Therefore, it is clarified that supply of drinking water for public purposes, if it is not supplied in a sealed container, is exempt from GST." The assumption of the applicant that the supply made by them attracts exemption as it is sold in unsealed containers and aimed at public purpose is erroneous. The above Circular reiterates the point tha....