TMI Blog2019 (7) TMI 1605X X X X Extracts X X X X X X X X Extracts X X X X ..... ter in containers - whether selling of container and water is composite supply? - HELD THAT:- The selling water in containers is composite supply as the principal activity is selling of purified water only. - GUJ/GAAR/R/11/2019 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2018/AR/7) - - - Dated:- 24-7-2019 - R.B. MANKODI AND G.C. JAIN MEMBER Present for the applicant: Shri Avinsah Poddar, Advocate 2. The applicant, vide Form GST ARA-01, specifically mentioned their queries as under : 1) What is the classification when the water is sold in non-sealed container and its HSN code? 2) Where company is selling water in containers whether selling of container and water is composite supply? 2.1 The applicant M/s Aquaa Care (Surat) RO Technologies Private Limited, vide Annexure I Annexure-II, submitted the statements of relevant facts having a bearing on the question(s) raised which is as follows: M/s. Aquaa Care (Surat) RO Technologies Private Limited is a company registered under the companies act, 1956 incorporated on 12th February, 2010 having CIN - U29259GJ2010PTC059552 . The objective of the company is to carry on the business of importing RO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28th June 2017. 1.1 Provisions of Notification No 1/2017 - Central Tax (Rate) dated 28th June 2017 reads as under:- G.S.R. (E).~ In exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act; 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the central tax of- (i) 2.5 per cent, in respect of goods specified in Schedule I, (H) 6 per cent, in respect of goods specified in Schedule II, (iii) 9 per cent, in respect of goods specified in Schedule III, (iv) 14 per cent, in respect of goods specified in Schedule IV, (v) 1.5 per cent, in respect of goods specified in Schedule V, and (vi) 0.125 per cent, in respect of goods specified in Schedule VI appended to this notification (hereinafter referred to as the said Schedules), that shall be levied on intraState supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule III - 9% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aerated water, mineral water, purified water, distilled water, medicinal water, ionic water, battery water, de-mineralized water if they are sold in non-sealed container. ii) As the words used in Notification no is Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] which means treated water (aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralized) if sold in sealed container are not exempt and taxable as per Notification number 01/2017 - Central Tax Rate. But if the same is sold in non-sealed container are exempt from GST. 2.7 Business Process of the Applicant as submitted by the applicant :- i) As already mentioned in the business process in Annexure I , the proposed activity of the applicant includes selling of water in containers as well as without containers where the customers carry container with themselves. ii) Thus as per interpretation and understanding the transaction falls under Notification Number 02/2017 - Central Tax - (Rate) dated 28th June, 2017 as the applicant is not selling the water in sealed containers they are only providing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the applicant is providing the container; the applicant is supplying water and for supply of water they are providing containers and hence there is supply of two or more taxable supplies ; water cannot be sold standalone without filling in the containers and thus the supply is naturally bundled arid supplied in conjunction with each other in the ordinary course of business; and now the selling of water is the principal supply, containers are used just for filling it. And thus, applicant believes that all the conditions of composite supply are satisfied, selling of container and water is composite supply and shall be taxable at the same rate at which water is taxable i.e. also exempt. The applicant M/s Aquaa Care(Surat) RO Technologies Pvt. Ltd. has also submitted the list of directors as on 15.01.2018 which are as follows: List of Director as on 15/01/2018 Sr.No. DIN Name Address Date of Appointment 1 05321726 PAWAN BMARADIA 404, Gurudev Apt, L.H. Road, Surat. 395006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nless sold in sealed container is not taxable under GST. iv) Applicant has therefore prayed to kindly pronounce the ruling in affirmative that GST not applicable. 1.2 Regarding Question 2, i.e. 1.2.1 Where Applicant is selling water in containers whether selling of container and water is composite supply? i) In this regard applicant has the same view as already submitted in Annexure II, annexed with the application of Advance Rulings, which is reproduced as under. For being a composite supply there is 3 conditions which is to be satisfied: ✓ two or more taxable supplies of goods or services or both; ✓ naturally bundled and supplied in conjunction with each other in the ordinary course of business; and ✓ one of which is a principal supply ii) If the above three conditions are satisfied then the supply shall be taxable at the rate of principal supply of goods or services. Let's evaluate the provisions pertaining to composite supply in the present case:- For selling of purified water it is to be filled in some glass, bottles or containers. In case the customer carry the same with on their own there is nothing like composite su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold in non-sealed container and its HSN code? (b) Where applicant is selling water in containers whether selling of container and water is composite supply? (2) The applicant has further mentioned in Annexure-II submitted with their application that as per provisions of notification no. 01/2017-Central Tax(Rate) dated 28-06-2017, the rate of applicable tax on mineral water as per schedule-III, S.No. 24 (Chapter sub heading 2201) on the product- waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured is 9% CGST. The applicant has further mentioned S. No 99 of the provisions of Notification no. 02/2017 Central Tax(Rate) dated 28-06-2017, which is as under- Sr. No. Chapter/Heading/Sub-heading/tariff item Description of Goods 99 2201 Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) As per the Notification no. 02/2017 Central Tax (Rate), - In exercise of the powers conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selling of purified water with container as a single supply as the principal activity is only selling of purified water. 4. Discussion and findings: We have gone through the submission of the Applicant and also the comments given by the jurisdictional CGST Commissionerate. 4.1 Now we take the queries for discussion. The first query is: What is the classification when the water is sold in non-sealed container and its HSN code? i) The understanding of the applicant as well as that of Jurisdictional office is that the classification of the water sold in non-sealed container and sealed container both are classified under chapter 2201. ii) However, the activity of applicant is to purify water using RO and UV technology and sell the purified water in glass (without seal or lid) and in bottles. For selling of water, the company purchases containers including bottles and glasses. The company will sell purified water to the Customers on Railway station/ Villages. For this purpose the company will set up water stations at the railway platform and Water ATM at the villages to supply purified water. iii) The applicant has mentioned regarding the press release dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix) water sold in sealed container. Since the applicant has himself claimed that they will be selling purified water, it is not eligible for benefit under Sr. No. 99 of Notification no. 02/2017 -Central Tax (Rate) dated 28-062017. Circular no. 52/26/2018-GST, dtd. 09.08.2018 issued from F.No. 354/255/2018-TRU clearly states, at para 6.3, that water other than those excluded from Sr. No. 99 of Notification No. 02/2017 -Central Tax (Rate) dated 28-06-2017 would attract GST at NIL rate. Since purified water is excluded from Sr. No. 99 of Notification No. 02/2017 -Central Tax (Rate) dated 28-062017, it will not be eligible for nil rate of duty. 4.2 The second query is: Where company is selling water in containers whether selling of container and water is composite supply? i) We agree with the understanding of the applicant as well as that of Jurisdictional office that selling water in containers is composite supply as the principal activity is selling of purified water only. In view of the foregoing, we rule as under R U L I N G Question 1 : What is the classification when the water is sold in non-sealed container and its HSN code? ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
