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2024 (4) TMI 22 - AAR - GSTClassification of treated water - what is the appropriate classification of the treated water that would be sold by the Applicant, after carrying out various treatment process on the effluent water purchased by them - rate of GST applicable on the said treated water - HELD THAT:- Upon going through the processes effected by the Applicant, the effluent water is subjected to micro-filtration and sand filtration process to remove suspended impurities. They have then used a series of RO units for removing minerals. In spite of the RO treatment, the TDS of the treated water is higher, which can be seen from the test report. As per the report furnished by the South India Textile Research Association (SITRA) Textile Testing and Service Centre, test report No. V2300304, dated 9-8-2023 of Sample given for testing, in the case of the Applicant, it is seen that the recovered water contains chlorides, sulphates, Bicarbonates, etc. The TDS levels of the treated water as per the test report is 272 mg/1, which clearly shows the treated water is not demineralized as per the standard norms. From the above, it is clear that treated water cannot be construed as de-mineralized water. As discussed, treated water will not fit into Sl. No. 24 of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017. Also treated water is not demineralized water as claimed by them but water, without any special characters as indicated in the tariff entries. Therefore, it is amply clear that, water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for reuse by the dyeing and bleaching units as a solvent and as a washing, rinsing medium. Thus, it aptly fits into Sl. No. 99 of Notification No. 2/2017-C.T. (Rate), dated 28-6-2017 under the Heading 2201 rather than Sl. No. 24 of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 under the same Heading 2201. It is observed that the process carried out by the Applicant involves conversion of effluent water into treated water to make it suitable for reuse by the member units. At the same time, the treated water cannot be put into any other usage, as the same is not completely free of impurities, bacteria and other harmful micro-organisms and chemicals. The above facts reiterate that the ultimate intention behind the effluent treatment process is to treat the effluent water discharged by textile units to recover water, salt and other chemicals consumed during the course of dyeing and bleaching to the maximum extent possible so as to reuse the same without getting it discharged to pollute water bodies. Moreover, ZLD has been mandated by the TNPCB for all the highly polluting industries including Textile Dyeing and Bleaching industries in order to prevent pollution of River water and ground water. Therefore, it is evident that the common effluent treatment plant has been set up in order to comply with the legislative and environment regulations thereby conserving water through recovery and reuse and not to manufacture water or chemicals. Therefore, we find that effluent treated water is eligible for exemption as per Notification No. 2/2017-Central Tax (Rate) as amended vide Notification No. 7/2022-Central Tax (Rate), dated the 13th July, 2022 Therefore, The classification of treated water to be sold by the applicant is correctly classifiable as per Notification No. 2/2017-Central Tax (Rate). The said treated water is eligible for exemption as per the notification.
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