TaxTMI 
TaxTMI 
2023 (8) TMI 1349
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....ircumstances supporting the original advance ruling have changed. 4. In terms of Section 104 of the Act, where the Authority finds that advance ruling pronounced by it under sub-section (4) of Section 98 or under sub-section (1) of Section 101 has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant as if such ruling had never been made. 5. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s Karaipudur Common Effluent Treatment Plant Private Limited, S.F.No.10/1, Karaipudur, Arulpuram post, Tiruppur (hereinafter called as the 'Applicant') is registered under the GST Acts with GSTIN: 33A....
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....ter press for extracting sludge which is dried in sludge storage cum drying beds for further disposal.- • Phase II - Reverse Osmosis: The treated effluent from phase I is fed into three stage RO system for removal of dissolved inorganic salts and 80 to 85% of water will be recovered as reusable water. Additional fourth phase and fifth phase RO treatment recovers brine solution for reuse of member units. • Phase - III- Thermal Evaporation: The reject from sixth RO is further subjected to thermal evaporation through Multiple effect evaporator to separate mixed salt and mother liquor. • Phase IV - Brine treatment: To overcome the difficulties in concentrating and crystallizing Sodium Sulphate and Sodium Chloride in the Evaporator system and to reduce fresh salt purchase by member units, the brine reuse technology has been implemented. 3.0 The Applicants were offered personal hearing and it was held in digital platform on 19.05.2022, wherein Shri. S. Harishankar, Auditor (Authorised Representative-AR) appeared for the Applicant and reiterated the submissions made in the application. The Applicant has also submitted the details of effluent treat....
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....o Enviro Protection Limited (AAR Gujarat -GUJ/GAAR/R/2002/47). 3. In the case of M/s. Kasipalayam Common Effluent Treatment Plant Private Limited (AAR Tamilnadu - 23/AAR/2021), it was pronounced that, Water recovered, which is de-mineralized water for Industrial use is classifiable under Heading No. 2201 as Waters described under SI. No. 24 of Annexure-III of Notification No. 01/2017 - Central Tax (Rate), dated 28-6-2017 taxable at rate of 18 per cent GST. 3.6 The central jurisdictional authority has reported that, there are no proposals pending disposal in respect of the applicant. 3.7. The State jurisdiction Authority, Assistant Commissioner (ST), Palladam-1 assessment circle has submitted the following remarks vide letter dated 05.07.2022;- • The principal supply done by the assessee is supply by way of treatment of effluents in a Common Effluent treatment plant (SAC-999432). Hence the classification of the supply of output as sale of goods is not correct. Rate of GST on Services 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 Go....
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....he group 99943 water treatment and disposal services. 4.3. In order to prevent pollution of River water and ground water, TNPCB has made the Zero Liquid Discharge system (ZLD in short) mandatory for all the highly polluting industries including Textile Dyeing and Bleaching industries, Tanneries etc., which use considerable amount of salt in the process and consume huge quantity of water. The ZLD system ensures recovery of water & salt from the effluent water, thus preventing pollution of River / ground water. 4.4 In this context, the Applicant is functioning as a common plant to treat the effluents generated in the member textile dyeing units during the dyeing and bleaching process recovering maximum quantity of water, salts and other solids which could be beneficially reused, leaving zero discharge at the end of the treatment process. 4.5 As per the submissions made, at present, the Applicant is rendering the service of hazardous waste treatment and disposal services, by treating the effluent water and supplying treated water and other recovered products for reuse by the member units. Now, they have proposed to purchase effluent water from the member unit and after treati....
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....he conjoined reading of section 4 of The Sale of Goods Act, 1930 and the Hon'ble Supreme Court judgement cited supra, it is clear that the modus of operation as purchase of effluent and sale of output is applicable only if all the elements cited in the Section and judgement cited are present. If that is the case, then the classification of supply by the Applicant as sale of goods is correct. However, it is emphasized that the mode of operation intended by the applicant i.e. purchase of raw effluent, treating the same and selling the resultant products, can be classified as sale of goods, if and only if, the applicant follows the procedures envisaged in the Sale of Goods Act and rationale of the observations of Hon'ble Supreme Court. If such is the case, the proposed mode of purchase of raw effluent, treat it on own account and supply of output, can be treated as sale of goods and consequently the first question is answered in the affirmative. 4.10. The next question to be examined is 'whether the classification of water sold as 'water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drin....
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....h India Textile Research Association (SITRA) Textile Testing and Service Centre, test report No. V2000610 dated 30.03.2021 of Sample No.:V2000610-3, in the case of Kasipalayam CETP, it is seen that the recovered water contains chlorides, sulphates, Bicarbonates, etc. Therefore, it is clear that effluent treated water cannot be construed as de-mineralised water. 4.17. On the contrary, Chapter 22- Beverages, Spirits and Vinegar, covers water, non-alcoholic, alcoholic beverages which are meant for human consumption. Effluent treated water does not fit into this group as it is unfit for human consumption. 4.18. More specifically, as per explanatory notes to the Heading 22.01 - Waters including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured; Ice and snow, this heading covers; (A) Ordinary natural water of all kinds (other than sea water - see heading 25.01). Such waters remain in the heading, whether or not clarified or purified, except that distilled or conductivity water and water of similar purity are classified in heading 28.53. The heading excludes sweetened or flavoured w....
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....ued as falling under "purified" water for the purpose of levy of GST. 5.2. In general, Water, falling under heading 2201, with certain specified exclusions, is exempt from GST vide entry at SI. No. 99 of notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017. 5.3. Accordingly, it is hereby clarified that supply of treated sewage water, falling under heading 2201, is exempt under GST. Further, to clarify the issue, the word 'purified' is being omitted from the above-mentioned entry vide notification No. 7/2022-Central Tax (Rate), dated the 13th July, 2022. 4.21 The same analogy is applicable to the case on hand. The relevant entry in Notification No. 2/2017 - Central Tax (Rate) dated 28th June 2017 is: SI.No. Heading Description of Service Rate 99 2201 Water [other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] Nil 4.22. In this connection, it is observed that, all the other categories of water as mentioned in the exclusion clause have some special characteristics and specialized uses such as they are used in aerated drinks, medicinal/ health uses, automoti....