TaxTMI 
TaxTMI 
2023 (12) TMI 1049
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....dvance ruling have changed. 4. Advance Ruling obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. At the outside we would like to 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 Mannarai Common Effluent Treatment Plant Private Limited, No. 209/2A, S. Periyapalayam Post, Uthukuli Road, Tiruppur - 641 605 (hereinafter called as the 'Applicant') is registered under the GST Acts with GSTIN: 33AACCM4445J1ZJ. 2.0 In their application for Advance Ruling, the Applicant has stated, inter-alia, the following as their nature of activity proposed: (i) the Applicant is an effluent treatment plant promoted by dyeing units; (ii) the Applicant is planning to buy the effluents from ....
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....d 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 18,11.2022, 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 treatment process carried out by them which were received on 24.11.2022. 3.1 Another Personal Hearing was held on 18.11.2022, as there was a change in constitution of Members. In this Personal Hearing which was conducted virtually, the AR reiterated the submissions already made and explai....
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....is classifiable under Heading No. 2201 as Waters described under Sl. 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), Tiruppur (Rural)-1 Assessment Circle has submitted the following remarks vide letter dated 07.09.2022; • The principal Supply done by the applicant is supply of services by way of treatment of effluents in a Common Effluent treatment plant (SAC-999432). The applicant has stated in their letter dated 15.11.2021 that their company has correctly adopted the tariff classification under entry 999432 with description 'services by way of treatment of effluents by Common Effluent Treatment Plant'. 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. More so, the applicant have raised tax invoices by mentioning their service ....
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....nd 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 treating the same they propose to supply the resultant products to their member units so as to classify their activities as supply of goods. 4.6 From the various submissions of the Applicant both during the personal hearing and written submissions, it is clear that the applicant seeks to purchase the raw effluent and proposes to treat the same. The applicant proposes to sell the resultant products at market rates. 4.7 In terms of section 4 of The Sale of Goods Act, 1930, "4. Sale and agreement to sell. - (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price There may be a contract of sale between one part-owner and another. (2) A contract of sale may be absolute or conditional. (3) Where under a contract of sale the property in the goods is transferred from [he seller to the buyer, the contract is called a sale, but where the t....
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....wered 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 drinking water packed in 20 litre bottles) under heading 2201 is correct. ' 4.11 In this context, the Applicant has referred the advance rulings pronounced in the identical issue in the following cases. 1. M/s. Hojiwala Infrastructure Limited (AAR Gujarat - GUJ/GAAR/R/2002/48) 2. M/s. Palsano Enviro Protection Limited (AAR Gujarat - GUJ/GAAR/R/2002/47) 3. M/s. Kasipalayam Common Effluent Treatment Plant Private Limited (AAR Tamilnadu 23/AAR/2021) 4.12. In all the above referred advance rulings, it was pronounced that, Water recovered out of effluent treatment process, which is de-mineralized water for Industrial use is classifiable under Heading No. 2201 as Waters described under Sl. No. 24 of Annexure-III of Notification No. 01/2017 - Central Tax (Rate), dated 28-6-2017 taxable at the rate of 18 per cent GST. 4.13. To decide upon the taxability of effluent treated wat....
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....ed; 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 water (heading 22.02) (B) Mineral Waters, whether natural or artificial Natural mineral waters contain mineral salts or gases. The composition of these waters varies considerably and they are generally classified according to the chemical characteristics or their salts, e.g.: (1) Alkaline waters (2) Sulphated waters (3) Halide waters (4) Sulphuretted waters (5) Ferruginous waters Such natural mineral waters may also contain natural or added carbon dioxide. Artificial mineral waters are prepared from ordinary potable water by adding the active principles (mineral salts or gases) present in the corresponding natural waters so as to produce waters of the same properties. (C) Aerated Waters (carbonated waters), i.e. ordinary potable waters charged wit....
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.... 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, automotive cooling system, sterilization, laboratory application, car battery etc. 4.23. In a similar issue, the AAAR / Maharashtra in it its ruling MAH/AAAR/AN-RM/02/2022-23, dated 01.04.2022 in the case of M/s. Rashtriya Chemicals & Fertilizers Ltd. has held that as the water coming out from Sewage Treatment Plant still contains organic and inorganic substances, such as suspended particles, grit, clays, pollutants like nitrogen, phosphorus, etc. is not pure due to presence of the said impurities and foreign elements and therefore will be eligible for exemption in terms of entry at Sl. No. 99 of Notification No. 02/2017, CT (Rate), dt. 28.06.2017. 4.24. In this regard, it is observed that the process carried out by the Applicant Involves conversion of effluent water into treat....