TMI Blog2021 (3) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to TCMC and other stake holders on completion of construction as per the CA and the sale of water is to the Off-take points at Water Distribution Systems(WDS) metered therein. Thus, this activity of treatment of water on own account and supply of water is sale simpliciter and therefore this notification which provides exemption to services do not have any application with regard to supply of water. Sewerage treatent services - HELD THAT:- In this instant the supply made by the applicant is a pure service of an activity listed as Item 6 of 12th Schedule (Article 243W) of the Constitution, i.e., an activity entrusted to a Municipality and the supply is made to TCMC, a local authority by the applicant and therefore the exemption at SI.No. 3 of the Notification No. 12/2017-C.T.(Rate) is applicable to the case at hand and we hold the applicant is eligible for the exemption in respect of the sewerage treatment services provided to TCMC. Consultancy services extended by the applicant to TCMC - HELD THAT:- On perusal of the agreement it is seen that TCMC intends to provide Water Supply and Underground sewerage schemes under the Tamilnadu Urban Flagship Investment Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cheque Bouncing Charges - Held that:- these charges will not form a part of the Water Charges and are Miscellaneous Charges for tolerating the dishonor and again these do not merit exemption. Connection services on no profit and no loss cost recovery basis - Held that:- In as much as the activity rendered is in relation to setting of new distribution lines in the current project as per the CA, and such lines are held as their assets in their book of accounts, we agree to their contention that the incidence of provisioning of services at that instant do not arise, the activity being self-service. Connection/ Reconnection/ Disconnection/ Permanent Disconnection Charges - Held that:- it is seen that these are charges collected by the applicant from the Industrial Units in relation to Water Distribution Services undertaken by them for Sale of Water to such units. Water Distribution Services are identical Services with SAC 9969 and is taxable@ 9% CGST and 9% SGST - TN/05/ARA/2021 - - - Dated:- 26-2-2021 - THIRU SENTHILVELAVAN B., I.R.S AND THIRU KURINJISELVAAN V.S., M.SC., (AGRI.), M.B.A., MEMBER Note: Any appeal against this Advance Ruling order shall lie be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment activities in the area of water supply at New Tirupur.; They had implemented an integrated water supply project for the town of Tirupur.; In order to implement the integrated water supply and sewage treatment project for Tirupur City Municipal Corporation (TCMC), wayside villages and Tirupur Local Planning Area (TLPA), a Concession agreement was signed between the Government of Tamilnadu, Tirupur Municipality (now Corporation) and the applicant to implement a 185 million litre per day (MLD) water supply project expandable upto 250 MLD and a 15 MLD Sewage Treatment plant (STP) expandable up to 30 MLD at the total project cost of ₹ 1023 crore.; By virtue of the Concession Agreement entered and the mere nature of the activity, NTADCL assumes the responsibility under Article 243 G and Article 243 W contemplated under the sixth schedule of the Constitution of India.; They had signed a water drawal agreement with TN Government for drawing raw water up to a Maximum of 185 Million Litres Per day from the river Cauvery for supply towards domestic and non-domestic purposes within the Tirupur Municipality. 2.2 The applicant has stated Notification 01/2017 includes waters wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r at (WDS SPS). They bill to the Tirupur Municipality Corporation. For textile industries, they are in charge of giving connection. They are fulfilling the obligation of Tirupur Municipal Corporation to supply portable water and do water treatment. The price to Municipal Corporation is fixed by the Municipal Corporation. For industries, they supply on cost based recovery. They stated that they are eligible for exemption at SL No. 3 of Notification No. 12/2017 as they only render pure services and SI. No. 4 as they are governmental authority. They submitted current share holdings pattern. They also submitted the Resolution for formation of the organization, MOA, AOA, Certificate of registration under companies Act. They undertook to submit Bulk Water Supply Agreement, service agreement and relevant agreement with Industries, Invoices for the consultancy agreement within two weeks and the State Jurisdiction Officer made their submissions. 3.2 In the written submission, they had inter-alia stated as follows: NTADCL is a Public Limited company promoted by GOTN, TWIC and ILFS Ltd as a Special Purpose Vehicle (SPV) with an exclusive concession to provide the water treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution They are carrying activity in relation to the Article 243W and 243G which are appearing in 12th Schedule SI.No. 5 6 and 11th Schedule SI.No.11. They are rendering pure services to a local authority by way of any activity in relation to Article 243W and 243G of the Constitution of India. Accordingly, it is claimed that the said services are exempted by availing the Exemption under Notification No. 12/2017 read with SI.No.3, 3A under Chapter 99. Pure services are defined in Schedule II clause 5. As per Schedule II Clause 5(e), (i) it is evident from the Concession Agreement that they are agreeing to the obligation to do and act by entering into the Concession Agreement ii) further the Company obtains a right to use the water from river Cauvery by way of a Bilateral Water Drawal agreement. As per the above interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service, in order to test the classification of waters under Notification 01/2017 SI.No.24-Chapter No.2201 i.e., charging vide this notification but however the same is exempted vide Notification No.2/2017 vide SI.No.99 - Chapter 2201, which is reproduced below: Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralised and water sold in sealed container) Whether the water treatment process undertaken by them would fall within the meaning of the word purification and if considered the Notification no: 01 [2017 read with the exemption vide notification no: 02/2017, they believe that as they are supplying the raw water extracted by using the cleaning up process of dust particles and supplying in potable condition for the human consumption and industrial consumption without changing the original nature of the water, there is no purification involved as the basic nature of water remains same. Notification No. 2/2017 - Central Tax dated 28th June 2017 absolutely exempts as many as 149 items with defined Chapter/ Heading/Sub-heading/tariff from intra-State supplies of such goods. This list of items covers items such as Print ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waste management the following cases are as follows: [2019] 106 taxmann.com 109 = 2019 (6) TMI 486 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL in the case of Indrajit Singh - Exemption provided for conservancy solid waste management for Howrah Municipal Corporation M /s. Dhananjay Kumar Singh = 2019 (2) TMI 64 - AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH - Exemption provided for solid waste management for Chhattisgarh Housing Board. Further Simultaneous availment of two or more exemptions is permissible, as the beneficial notifications can operate in regard to the same Assessee and they can claim benefit of the notifications independently, as there are no saving clauses in the notification. This position is based on the Central excise case in JSW energy Ltd V UOI (2015) 321 ELT 664 (Bom HC DB) = 2013 (9) TMI 829 - BOMBAY HIGH COURT The above notifications are in conditional based exemptions. It is to be noted that exemption cannot be denied on supposed intention of exemption authority, it has to be operated by the words which have been employed to effectuate the legislative intent. [ Innamuri Gopalan vs State of AP 14 STC 742 (SC)] = 1963 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Item No.3. o Offtake and treatment of sewage (only to TCMC) : NTADCL is rendering offtake and treatment of sewage services to TCMC, which is covered under Article 243W read with Item No.6 of 12th Schedule. As NTADCL is rendering pure services to the Government agency they seek exemption under Notification No. 12/2017 Item No.3. o The activity mentioned below from (iii) to (iv) are ancillary to the above mentioned activity under (i). The above activity are pure services rendered to the Government agencies and accordingly they seek exemption under Notification No. 12/2017 Item No.3 for the following services (iii) to (iv) as they are also pure services o (iii) Interest on delayed payments as delay payment penalty as per the Service Agreements : As envisaged under the CA, a Bulk Water Supply Agreement (BWSA) is entered with TCMC and Service Agreements with other Government agencies. As per these agreements, NTADCL is eligible to charge the delay payment interest wherever the payment is received beyond the due date. Accordingly, NTADCL is charging these customers a delay period interest in the billing. As deliberated above in view of the pure services of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Government control and accordingly, considered to be a Governmental authority, they seek exemption for this supply of all its services under Notification 12/2017 read with Item 4 The supply of water to industrial customers was deliberated in the previous hearing dated 11.02.2020 as Goods in view of royalty paid on the industrial water that amounted to purchase of water and accordingly, Hon ble Member deliberated to bring the water supply as Goods within the purview of chargeability of GST. At this juncture, it is pertinent to note that the activity of NTADCL is a combined water supply and sewage treatment promoted by GOTN specifically to render the services stipulated under Article 243W read with Item No. 5 6 of the 12th Schedule, they cannot take the water supply as a Goods in isolation and treat the same for chargeability of GST. Despite the fact explained above, even if the stand is considered, the potable water supplied is exempted vide Notification 2/2017 Item NO 99. The fact of exemption of drinking water for public purposes was clarified vide Circular No.52/26/2018-GST. The Notification 12/2017 expressly categorized the water as NIL tax rate and the Circular No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Circular No. 102/21/2019-GST and accordingly, this is classified as supply of service only. Hence it is exempted along with the service exemption claimed above. (iv) Connection / Reconnection charges : These are one time charges at the time of connection / reconnection envisaged under Service Agreements and being charged based on the cost and size of water meter to be provided to industrial customers. (v) Permanent disconnection charges : This will be charged only when the customer requested to discontinue water supply permanently. The estimate is being raised based on site position individually for removal of pipeline and fittings. It is being executed after payment received from customer based on demand raised. (vi) Non-revenue cost recovery basis: NTADCL has initially set up the entire infrastructure facility for water drawal, treatment, storage and distribution up to the point of supply and holds the entire assets including distribution network in the books of NTADCL. Whenever there are new connection requirements from industries, the same are provided by obtaining necessary advance from the respective industry. Any excess / short of advance recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner; Out of nine (9) Directors in the applicant Company, there are three (3) I.A.S. cadre Directors from GOTN and 2 Directors from SBI IDBI that accounts for more than 50% Directors who have control over the Company on any policy making. IAS directors appointed under TWICL investor control the day to day management and policy decisions and have complete influence on the operating decisions. Further the term control is also defined as per AS 18, Related party means at any time during the year, one party has an ability to: Control the other party Exercise significant influence over the other party in making financial and/or operating decisions *Control means: 1. Ownership, direct or indirect, of more than 50% of the voting power of an enterprise, 2 In case of company - control of the composition of the board of director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extend exemption under this category. 5.1 The applicant was extended an opportunity to be heard again on 27.03.2020 but the same was not held due to COVID-19 conditions. Effective 19.05.2020, there was change in the authority and Shri. B. Senthilvelavan, Additional Commissioner was appointed as CGST Member of the Authority. In view of change in the Authority and due to the prevailing pandemic, the applicant was offered to be heard through Digital media and the applicant acceded to the same. Accordingly, the applicant was heard on 19.11.2020. 5.2 The authorized representative appeared for the hearing virtually. They referred to their submissions dated 11.2.2020 and 27.2.2020 and stated that they claim exemption under SI.No. 3, 3 A of Notification No. 12/2017 as they undertook combined water and sewage treatment entrusted in them through the Concession Agreement entered by them with Government Tamil Nadu and Tirupur Municipality. They stated that the industrial water supply made by them is as per the Concession Agreement and in the designated area only. On the incidental charges (Except connection charges), they stated that these are charges for the services rendered in ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice is pending adjudication in their office on the subject matter. The State Tax Officer has offered the following comments: NTADCL has made a concession agreement with Government of Tamil Nadu and Tirupur City Municipal Corporation to develop, construct, operate and maintain a Water Supply Project and Sewerage facility for domestic and non-domestic purposes within Tirupur City Municipal Corporation, wayside villages, industrial units and also outside Tirupur City Municipal Corporation. Based on the agreement, the NTADCL has obtained rights to abstract raw water from Cauvery river in a specified manner and to develop, finance, design, construct, own, operate and maintain: (1) Water treatment infrastructure facilities (2) Water distribution system (3) Sewerage system (4) Sewerage treatment facilities (As per schedule B of the concession agreement) Using these facilities NTADCL is providing water treatment and supply, sewage off-take and treatment service. Upon termination of concession period, NTADCL has to transfer all the facilities to GOTN/Tirupur Municipality. The Total Cost of Project is being recovered from the purchasers (Tirupur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered as a distinct supply but a part of the Integrated Water project. In view of above, the supply may be classified into two categories and the rate of tax maybe levied as follows 1. Supply to Tirupur City Municipal Corporation: Whatever services provided or infrastructural set up transferred to GOTN/Tirupur City Municipal Corporation should be treated as composite supply that attracts 12% as per the notification 11/2017, Central tax, dated 28.06.2017 2. Supply to other than Tirupur City Municipal Corporation; Since there is no transfer of infrastructure set up the rate of tax applicable to the corresponding entries may be levied. Sale of Water: The consideration for water supply is received based on the quantity supplied and hence it may be considered as sale of water which attracts NIL rate as per Notification No.2/2017-CentraI Tax (Rate) dated 28.06.2017. HSN Code Description Rate of tax 2201 Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 243G read with item no.11 of the 11th schedule, with control by GOTN- IAS officials in the Board for continuous monitoring. They have claimed that the functions that are ought to be carried out by TCMC is entrusted to them by virtue of CA that implies they assume such functions that are otherwise to be rendered by TCMC and they have claimed total exemption for the above activities by applying SI.No. 3,3a, 4 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 and Sl.No. 99 of Notification No. 02/2017C.T.(Rate) dated 28.06.2017 read with Circular No. 52/26/2018-GST. 8.3 The State Tax Officer has opined that the taxpayer s supplies to TCMC, cannot be identified as merely sale of water or sewage treatment facilities or incidental activities but is a composite supply of providing Infrastructural set up transferred to GOTN/TCMC and attracts 120% as per the Notification No. 11/2017-C.T.(Rate) dated 28.06.2017; and in respect of supply to other than TCMC, sale of water attracts NIL rate as per Notification No. 02/2017-C.T.(Rate) dated 28.06.2017 and Sewage treatment charges attracts 18% as per Notification No. 11/2017-C.T.(Rate) dated 28.06.2017. The rate of tax on the incidenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to be entered into by the Company and which the Shareholders and the Lenders agree are to be treated as a Project Agreement For the current proceedings, the applicant has furnished copy of the Concession Agreement(CA), Bulk Water Supply and Sewage Offtake Agreement (BWSA), Service agreements entered with Director of Town Panchayat, Director of Rural Development and TWAD; the Bilateral Water Drawl agreement with GOTN and Contract for consultant s services dated 02.12.2019 and have stated that based on the activities entrusted in them vide these agreements, they assume the sovereign functions of TCMC by providing water treatment and supply service and sewage offtake and treatment service and any other services such as providing of DPR and CMSCS executing under 243W read with the 12th Schedule of the Constitution of India and Article 243 G under 11th Schedule, thereby claimed exemption under SI.No. 3 and 3A of Notification No. 12/2017. 9.2 On examining the above agreements, it is seen that in order to develop the water and related infrastructure for collection, treatment and disposal of waste water and other infrastructure at Tirupur, The Tirupur Area Development Programme ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erage off-taken for treatment and disposal by the applicant and it has been stated that in the event of any shortfall, the term of the Concession is to be extended to ensure recovery of the outstanding Total Cost of Project and Returns due there on. The applicant has been given right to abstract Raw Water from River Cauvery upto a maximum of 250 MLD out of which upto a maximum of 48.70 MLD of Raw Water to be allocated for Domestic and Non-Domestic purposes within TCMC, upto a maximum of 165 MLD for Industrial Units for Non-Domestic Purposes outside TCMC in the service Area and upto a maximum of 36.30 MLD of Raw Water for Domestic purposes to wayside Panchayat Unions and villages in TLPA and has been given absolute right to reallocate the above mentioned quantities in the event that stated quantities for Domestic Purpose are not off taken or not paid for by TCMC and way-side Villages to other Purchasers within the service Area. The applicant vide Article 17 of the CA is entitled to determine the price of Potable Water, Price of Sewage Treatment, Connection fee, reconnection fee, security deposit in accordance with the agreement and charge the purchasers. Further under Article 3.4 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection charges/reconnection charges; as can be seen from the following invoices: Invoice No. 4352-C 1/3 dated 31-Jan 2020 raised on The Commissioner TCMC against water charges based on the Meter reading of Meter No. 01D001- It is stated that As a precautionary measure, before distributing drinking water to the public, necessary chlorine may be added by the Municipal Corporation and then distributed Invoice No. 4352- A 2/3 dated 31-Jan 2020 raised on the Commissioner, TCMC for Qty Consumed under additional 21 MLD Invoice No. 4352-1 3/3 dated 31-Jan 2020 raised on the Commissioner, TCMC for Misc. Charges- Interest on Delayed Payment It is seen that these invoices are raised with CGST/SGST as NIL and with HSN code:2201 Invoice No. 40946 dated 31.01.2020 raised on K P R Mill Limited for Water Charges and Other Miscellaneous Charges with CGST/SGST as Nil Invoice No. 4335-C1/2 dated 31-Jan-2020 for Sewage Treatment Charges[As per Chapter 99] raised on the Commissioner, TCMC with CGST/SGST as Nil Invoice No. 4335-I 2/2 dated 31-Jan-2020 raised on the Commissioner, TCMC for Misc. Charges- Interest on Delayed Payment with CGST/SGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment Authority vide their submission dated 27.02.2020 and claimed exemption as per SI.No. 4 of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. During the hearing held on 19.11.2020, they stated that they do not claim themselves as a Government Authority , as defined in the GST Law, though the policy decisions are made with the approval of the Government and in that context, it can be stated that they are under the control of the Government. The entry at SI.No. 4 of the said notification is as under: 4 Chapter 99 Services by Central Government, State Government, Union territory, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution. Nil Nil (Zf) governmental authority has the same meaning as assigned to it in the Explanation to clause (16) of section 2 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017); Explanation to Clause (16) of Section 2 of the Integrated Goods and Service Tax Act is given as under: Explanation -For the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Nil Nil relation to any function entrusted to a Municipality under article 243W of the Constitution. The above entry exempts pure services provided to a local authority in relation to functions entrusted to a Panchayat/Municipa1ity under Article 243 G/243W of the Constitution. 11.2 The eligibity to Supply of Water under this Notification is examined first. Providing Water Supply for Domestic, Industrial and Commercial Purpose is listed as Item 5 of 12th Schedule (Article 243W) of the Constitution. The applicant claims exemption under this entry for the activity of sale of water to the purchasers. It is evident that the entry exempts only services. The applicant abstracts water from River Cauvery, treats the same in the facility owned, managed, operated, maintained by them and sell the treated water to the Purchasers and charge them for such supply. The applicant is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices, Tasks and Expected deliverables, as per the Appendix to the Agreement broadly include services for carrying out contract and construction management including supervision of works and overall responsibility to deliver the output. field verification, support and assist TCMC in contract administration and compliance with contractual conditions, monitoring and preparation of progress reports, review of designs, drawings, technical specifications and estimations Construction Supervision and contract management including quality management Project management and Monitoring which includes planning and managing the project, review recommend on the Contractor s claim for progress payments assist in resolution of contractual issues including review, evaluation and confirmation of contract Variation Orders, assist in conducting regular meetings with all stake holders to discuss progress and issues related to implementation Review the Resettlement Framework already prepared for the project and Identify any further resettlement requirements/including social impacts identified during project implementation and costs that may be required and provide all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater, 5. medicinal water, 6. ionic water, 7. battery water, 8. de-mineralized water and 9.water sold in sealed container. Also, the Circular No. 52/26/2018-GST, dated 9-8-2018 issued from F. No. 354/255/2018-TRU, in para 6 has clarified as below : 6.1 Applicability of GST on supply of safe drinking water for public purpose : Representations have been received seeking clarification regarding applicability of GST on supply of safe drinking water for public purpose. 6.2 Attention is drawn to the entry at S. No. 99 of notification No. 2/2017-Central Tax (Rate), dated 28-6-2017, by virtue of which water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] falling under HS code 2201 attracts NIL rate of GST. 6.3 Accordingly, supply of water, other than those excluded from Sr. No. 99 of notification No. 2/2017-Central Tax (Rate), dated 28-6-2017, would attract GST at NIL rate. Therefore, it is clarified that supply of drinking water for public purposes, if it is not supplied in a sealed container, is exempt from GST. 12.2 On the eligibility of the above entry, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40946 dated 31.1.2020 relating to Tvl. KPR Mill Limited supply of water (to the industries) by the applicant revealed that there is no such mentioning of adding chlorine before use. Therefore, the supply of water to the industries are not merely considered as potable water for drinking purpose and not qualified for exemption as per entry No. 99 of Notification No. 02/2017 dated 28.06.2017 read with para 6 of circular no 52/26/2018-GST, dated 09.08.2018 issued from F.No. 354/255/2018 TRU as the water is not supplied as drinking water for public purpose. b. Ruling per: Shri. B.Senthilvelavan, Member CGST: I have gone through the views expressed by the learned State Member and I differ with the views of Thiru Kurinji Selvaan, V.S the respectful Member for the following reasons: (i) The clarification in para 6 of circular no 52/26/2018-GST, dated 09.08.2018 issued from F.No. 354/255/2018 TRU states that supply of drinking water for public purpose when not sold in sealed container is exempted. The notification is unambiguous in as much as it clearly states the type of waters which is not exempted. In my opinion on a joint reading Of the Notification and the Clarification, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nters into Flash mixer chamber which agitates rapidly for settling of heavier particles Flocculator (Retention Time-20 mts) - The water from the flash mixer enter into 3 set of Flocculator Chamber. In Flocculator chamber, Flocculation (reaction of chemicals with suspended solids in water, formation of flocks) takes place heavy particle settles down at the bottom of the tanks Clarifier (retention Time 20 mts) - The water from the Flocculator Chamber flows to Clarifier which consists of tube settlers inclined at 450 and with overflow launders. The suspended solids will settle at the tube settler and the water passing above the tube settler flows to Filter bed Filter bed(Retention time-20mts)- The filter beds is dual media(Anthrasite coal +sand) filter. The filtered water flows to the bottom of the filter bed by gravity to Clear water storage tank Thus, the abstracted water is processed by removing the solids(clarifloculation), gravity filtered(rapid gravity filtration) and chlorinated before supplied to purchasers, both TCMC other local authorities and the other Industrial Consumers. The standards of the abstracted raw water and the treated water in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable rate of tax is under Sl.No. 24 of Schedule III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 attracting 9% CGST and 9% SGST. 13.1 The applicant has required ruling on the activities they state Incidental to main business activities which are taken up as under: a. Interest receivable on delayed payments: The applicant has stated that as envisaged under the CA and BWSA, they are eligible to charge the delay payment interest wherever the payment is received beyond the due date. Accordingly, they charge their customers a delay period interest in the billing. They contend that in view of the pure services of the treatment and water supply, offtake and sewage treatments services undertaken by them, which they claim as exempted under Sl.No. 3 of Notification No. 12/2007-C.T.(Rate) dated 28.06.2017, the Interest on delay payment of charges for such services are also eligible for exemption under the said entry. Entry at Sl.No.3 provides exemption to Pure Services provided to the local authority by any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution. The applicant has claimed Interest on Delayed pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43 W of the constitution. Therefore, even when Interest on Delayed Charges is raised against their supply to TCMC in respect of delayed payment of Sewage Treatment Charges , the exemption under Sl.No. 3 of the Notification No. 12/2017-C.T.(Rate) is not available to the applicant. We hold that the Interest on Delayed payment Charges raised by the applicant is against the service of SAC 999794-Agreeing to tolerate an Act and is taxable @ 9% CGST and 9% SGST as per Sl.No. 35 of Notification No. 11/2017- dated 28.06.2017 readwith Sl.No. 35 of Notification No. II(2)/CTR/532(d-14)/2017 vide G.O. (Ms.) No.72 dated 29.06.2017 as amended. b. Cheque Bouncing Charges: The applicant has not elaborated on the situations such charges are levied. But the nature of charge is one of a penalty and is levied to tolerate the action of dishonor of the cheque. as per Section 15 of the GST Act, these charges will not form a part of the Water Charges and are Miscellaneous Charges for tolerating the dishonor and again these do not merit exemption under Sl.No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. We hold that the Cheque bouncing charges raised by the applicant is agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of reconnection of service From the copy of Invoice No. 40946 dated 31-Jan-2020 raised on KPR Mill Limited, it is seen that Water Charges and Other Miscellaneous Charges-New connection adjustment is raised from Copy of Invoice No.34006 dated 31-Dec-2018 raised on Sri Thirumagal Process, it is seen that Water Charges and Other Miscellaneous Charges-Debit Note- Meter Charges is raised. Thus, it is seen that these are charges collected by the applicant from the Industrial Units in relation to Water Distribution Services undertaken by them for Sale of Water to such units. Water Distribution Services are identical Services with SAC 9969 and is taxable@ 9% CGST and 9% SGST as per Sl.No. 13 of Notification No. 11/2017- C.T.(Rate) dated 28.06.2017 readwith Sl.No. 13 of Notification No. II(2)/CTR/532(d-14)/2017 vide G.O. (Ms.) No.72 dated 29.06.2017 as amended. 14. In view of the above we rule as under: RULING a. The applicant not being the class of persons specified in Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended, they are not eligible for the said Notification as discussed in Para 10.2 above. b. The activity of Sewage offtake and tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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