TMI Blog2021 (7) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... pted - the legislation does not expect, such purified water to be allowed for exemption from GST. In the subject case, the water supplied by the applicant to mahagenco is obtained after the treatment to sewage water as submitted by the applicant and the said water is not potable. Hence Entry No. 46 B which pertains to drinking water only is not applicable to the impugned product - TTW supplied by the applicant is purified Water and is covered Entry No.24 of Notification No. 01/2017-C.T. (Rate) dated 28.6.2017. The impugned goods, called as Tertiary Treated Water, is purified water which is sold to MAHACENCO for its further industrial use and falls under Entry No. 24 of Notification No. 01/2017 - the water obtained from sewage is covered under term waters . Hence it is taxable and same would be taxable @ 18% IGST under Entry 24 of Schedule-Ill of Notification No. 1/2017-Central Tax (Rate) dtd. 28.06. 2017 as amended by Notification No. 06/2018 and Central Tax (Rate) dtd. 25.01.2018. - GST-ARA-65/2020-21/21-22/B-35 - - - Dated:- 27-7-2021 - SHRI RAJIV MAGOO, AND SHRI T.R. RAMNANI, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CAPEX) and operating expenses (OPEN). The applicant is raising its bills in respect of CAPEX on quarterly basis and bills of OPEX on monthly basis at the pre decided rate Applicable GST is charged on these bills by the applicant and paid by NMC . In addition, the applicant has right to sale Treated Effluent/Tertiary Treated Water to any person for non potable application. 2. Maharashtra State Electricity Generating Company Ltd (Mahagenco) is a Limited Company registered under the Companies Act. NMC. Mahagenco and the applicant has entered into tripartite agreement dtd. 29.12.2017 for supply of Tertiary Treated Water (TTW) on daily basis. Under the agreement, the applicant is required to set up a Tertiary treatment plant (TTP) to further treat water from STP at Bhandewadi and supply the TTW to Mahagenco through pipeline laid by the applicant from its Bhandewadi TTP to Mahagenco s Koradi and Khaperkheda Thermal Power Plant. As per agreement the applicant will sell TTW to Mahagenco as per rate agreed under the contract. The water supplied is not a potable drinking water but is suitable for Industrial use. 3. Entire process, carried out by the applicant on sewage water so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 BOD5 mg/l 350 5.0 3 Total Suspended Solids (TSS) mg/l 400 5.0 4 Turbidity NTU - 5.0 5 Total Nitrogen (N) mg/l 35 10 6 Total Phosphorus (TP) mg/I 15 5.0 7 Total Coliform MPN/ 100 ml 16,00,000 1000 8 Dissolved Oxygen mg/l - 2.0 9 Residual Chlorine mg/l - 0.2-0.5 4. The applicant has supplied TTW to Mahagenco effective from 05.06.2020 and after receipt of approval from Mahagenco raised its first invoice for this supply hearing No NW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2201 Drinking water packed in 20 litres bottles 6 NIL Schedule III- 9% 24 2201 Waters, including natural or artificial mineral waters and aerated waters. not containing added sugar or other sweetening matter nor flavoured other than Drinking water packed in 20 litres bottles 9 NIL Combined rate (SGST CGST)/IGST is 12% and 18% respectively 3. Under GST, several services and goods were exempted by issuing notifications under the CGST Act and SGST Act. Notification No. 02/2017-C.T.-(Rate), dt. 28-06-2017 was issued to notify the exemptions on supply of goods under CGST Act. Entry relating to water was notified at Serial No. 99 of the Notification. The same is reproduced below: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (%) Condition (1) (2) (3) (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and held as taxable in that case the same would be taxable @18% (9% SGST 9% CGST)/ IGST under Entry 24 of Schedule-3 of Notification No. 1/2017-C.T.-(Rate) dtd.28.06.2017 as amended by Notification No. 06/2018 and C.T. -(Rate) did. 25.01.2018. Additional Applicant s Submission (MAHAGENCO) on 13.01.2021 The Nagpur Waste Water Management Pvt. Ltd. (NWWMPL) has filed an application for advance ruling vide application reference no. AD271220014385j filed on 21/12/2020 to get clarification about taxability of tertiary treated water supplied by them to Maharashtra state Power Generation Company Limited (Mahagenco). In this reference, it is to stale that, the tertiary treated water received by Mahagenco from =NWWMPL is not completely fit and usable for the desired purpose of Mahagenco Chemically, sewage water consists of water and various soluble and insoluble organic and inorganic matters. Tertiary treatment of such sewage water neither removes all the impurities nor purify the water completely. Tertiary treated sewage water is not a purest form of waive for Mahagenco s use and it still contains impurities like Hardness. Alkalinity. Bacteria, viruses. TSS, phosphate, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning process that improves waste water quality before it is reused, recycled or discharged to the environment. The treatment removes remaining inorganic compounds and substances such as nitrogen phosphorus. Sewage treatment generally involves three stages called primary, secondary tertiary treatment. In short, Tertiary treatment of water is process of purification and applicant is supplying purified water to MAHAGENCO. Hence applicant is not eligible for benefit under Sr. No. 99 of Notification No 02/2017 Central Tax (Rate) Dated 28.06.2017. 3.3.1 In context with second question raised by the applicant, the entry in notification 01/2017 is reproduced below. Schedule Sr. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (%) Condition (1) (2) (3) (4) (5) (6) Schedule II-6% 46 B 2201 Drinking water packed in 20 litres bottles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred as MAHAGENCO). Maharashtra. The impugned product is called as Tertiary Treated Water which is generated from the Sewage Treatment Plant (STP). 5.3.1 Applicant has submitted that NMC, Mahagenco and the applicant have entered into tripartite agreement dated 29.12.2017 for supply of TTW on daily basis by the applicant to Mahagenco. As per the agreement, the applicant will sell 190 the TTW to Mahagenco as per rate agreed under the contract. The TTW supplied, is not potable but is suitable for Industrial use. The processes carried out by the applicant on sewage water so as to make it suitable to be supplied to Mahagenco for industrial use is mentioned in their application. 5.3.2 We find that the applicant has procured a contract from NMC to treat/purify the sewage that is generated and flows through the three rivers of the city of Nagpur. 5.4 We also find from the submissions made by the applicant that, different processes are carried out on the sewage water collected by the applicant, in order to purify the same for further use. The eventual product generated is purified sewage water and is called as Tertiary Treated Water (TTW). Thereafter, the TTW is pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever found to have industrial uses. Such a sewage water is purified by applying different processes in the STP plant as mentioned by the applicant. Thereafter, such obtained water is called as purified water and is sold to the MAHAGENCO for their industrial use. It is not used as potable or drinking water. 5.6.4 As per the parameters tested by the applicant, the properties of processed water generated from the sewage is different than the properties of the original sewage water received in the STP plant. Therefore in our view. Tertiary Treated Water is purified sewage water and since it is purified water. the same will not fall under Sr. No, 99 of Notification 02/2017-C.T. (Rale) dated 28.06.2017. Since the said entry at Sr. No. 99 mentions that water, other than purified , aerated, mineral, distilled, medicinal, ionic, battery. de-mineralized and water sold in sealed container, only will get exemption, therefore the impugned product being purified sewage water will not be exempted. 5.6.5 The legislation does not expect, such purified water to be allowed for exemption from GST. We feel that the subject product is out of purview of this entry and hence the subject product, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured other than Drinking water packed in 20 litres bottles are taxable and liable to tax @ 18% GST. 5.7.4 In the subject case, the water supplied by the applicant to mahagenco is obtained after the treatment to sewage water as submitted by the applicant and the said water is not potable. Hence Entry No. 46 B which pertains to drinking water only is not applicable to the impugned product. 5.8 The Dictionary meaning of Purification is the removal of contaminants from something. Thus, Purified water means water on which any process has been carried out for removal of contaminants for making it fit for use. As per the applicant s submissions, it is clear that various contaminants are removed from the sewage water, thus purifying it to make purified sewage water useful for Industrial purpose. As per the contention of applicant Tertiary Treated Water is not potable but it can be used for Industrial use. It is also submitted that the applicant is of the opinion that the supply of TTW by them to Mahagenco is taxable We do not find any reasons not to agree wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en that the Hon ble Supreme Court has also held that It is necessary to be able to formulate the genus, for if it cannot be formulated it does not exist. Unless you can find a category , said Farwell I.J. there is no room for the application of the ejusdem generis doctrine . 5.12.3 It is further observed in the same order that The true scope of the rule of ejus dem generis is that words of a general nature (following specific and particular words should he construed as limited to things which are of the same nature as those specified But the rule is one which has to be applied with caution and not pushed too far ---- 5.12.4 In the present matter, we have considered the proper word as per the statute held for specific Schedule Entry to decide the GST Rate thereon. Therefore the contention of the applicant is not acceptable. 5.13 Considering facts of the case and provisions of specific notifications of entries under CGST ACT, the term waters is specifically prescribed for the levy of taxes under Entry No.24 of schedule rates. Eventually, we conclude and hold that the purified Tertiary treated water is covered under Entry No. 24. 5.14 Considering above fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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