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2021 (8) TMI 534 - AAR - GSTExemption from GST or not - supply of drinking water to general public in unpacked/unsealed manner through dispensers/mobile tankers by a charitable organisation at a concessional rate - availability of exemption of GST as per SI.No 99 of Notification 02/2017-Central tax (Rate) dated 28/06/2017 and CBIC Circular No.52/26/2018-GST dated 09.08.2018 - Taxability of services extended to the public through mobile tankers - HELD THAT:- The applicant, as a party to its contractual agreement with local Gram Panchayat, sets up plant for purification of drinking water through Reverse Osmosis (RO) and supplies the purified water to its registered beneficiaries in unpacked/unsealed manner through dispensers/mobile tankers at a price of ₹ 7 for 20 litres. The exemption entry at sl. no. 99 of N/N. 02/2017 - Central Tax (Rate) dated 28.06.2017 excludes the following categories of aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralized, and water sold in sealed container - The supply in the instant case is ‘purified water', which is purified through Reverse Osmosis (RO) process in the plants established by the applicant and thus it is covered under exclusion of the exemption entry and is liable to tax. As per CBIC Circular No.52/26/2018-GST dated 09.08.2018, whether supply of drinking water in unpacked / unsealed form through dispensers / tankers, to general public is exempt? - HELD THAT:- As admitted by the applicant in the description of the detailed procedure involved in the purification of water at the treatment plants, it leaves no further doubt that the supplies are nothing but of purified water. Consequently, we come to the conclusion that the purified water supplies made by the applicant are not eligible for exemption either as per SI.No 99 of Notification No. 02/2017- Central Tax (Rate) dated 28.06.2017 or by the clarificatory circular No.52/26/2018-GST dated 09.08.2018. Whether services extended to the public through mobile tankers would attract exemption under GST or not? - HELD THAT:- Prima facie, there are two supplies involved in the instant case; wherein one is 'the supply of purified drinking water' and the other being 'the supply of the same through the mobile units to the public' - In the present case, the principal supply is supply of purified water whereas the service component of distribution through mobile units is the ancillary service. The purified water is eligible to tax @ 18% as it is not fit for exemption under the serial no.99 of notification No. 2/2017- Central Tax (Rate) dated 28.06.2017. The service component of distribution of water through mobile units is covered under SI.No. 13 of Heading 9969 Electricity, gas, water and other distribution services vide Notification No. 11/2017-Central Tax (Rate), dated, 28th June, 2017 and taxable @ 18 %. It is invariably a composite supply and hence the rate of tax of purified water prevails, being the principal supply.
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