TMI Blog2023 (9) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... The TDS levels of the treated water as per the test report is 444 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. The treated water will not fit into Sl.No. 24 of Notification No. 01/2017-CT (Rate) dated 28.06.2017. Also treated water is not demineralized water as claimed by them but water, without any special characters as indicated in the tariff entries. Thus, 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 SI. No. 99 of Notification No. 02/2017, CT (Rate), dt. 28.06.2017 under the heading 2201 rather than SI. No. 24 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the same heading 2201. 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 withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s Angeripalayam Common Effluent Treatment Plant Limited, SF No. 89, CETP Garden, Kanjanpalayam, Mannarai Village, Pitch ampalayam, Pudur Post, Tiruppur - 641 603 (hereinafter called as the 'Applicant') is registered under the GST Acts with GSTIN: 33AACCA9613N1ZJ. 2.0 In their application for Advance Ruling, the Applicant has stated, inter-alia, the following as their nature of activity proposed:- (i) the Applicant is a common effluent treatment plant, set up by the various dyeing units in that area; (ii) the Applicant is planning to buy the effluents from dyeing units and that the effluents will be delivered from the dyeing units to the Applicant through pipelines; (iii) the effluent will be processed at the plant and the resultant treated water is to be sold to the dyeing units. 2.1 The Applicant has sought for advance ruling on the following questions;- 1. What is the appropriate classification of the treated water that would be sold by the Applicant, after carrying out various treatment process on the eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase (IV) and fifth phase(V) of RO treatment is done through micron cartridge filter for desalination. RO IV V reject is treated with Lime soda process in a Clarifier-I for hardness removal and pH correction then taken through RO VI through micro filtration for further concentration. Final RO VI reject is treated through MEE-1, MEE-2, MEE-3 for further concentration and portion to Brine solution preparation. The MEE-1 concentrate and the MEE-2 mother liquor are sent to Brine solution preparation. Remaining RO VI reject is treated in MEE-2 MEE-3 for further concentration and where the salt is crystallized and removed pusher centrifuge. The mother liquor from MEE-3 is dried and powdered in ATFD (Agitated Thin Film Dryer). The Brine solution is treated with Lime soda process in Clarifier II for hardness reduction, the effluent pH is corrected and distributed to member units for reuse. 3.0. The Applicant's interpretation of law/facts in respect of the questions raised, they submitted the following:- The CGST payable on supply of various goods are prescribed under Notification 1/2017-CT(Rate) dated 28.06.2017, as amended, and Notification No. 02/2017-CT(Rate) dated 28.06.2017, as ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inlet Total Dissolved Solids (TDS - Minerals) of RO system is around 10,000 mg/1. On demineralizing, the ETP recovers 93% of demineralized water, which is fit for reuse. The TDS of demineralized water is 400 mg/1 only. The TDS of 7th stage RO system reject water is 1,50,000 mg/1. Some of the minerals, the percentage of which is present in RO feed and RO recovered is given below: The process of treatment of the effluent water received would be converted into purified/demineralized water as all impurities are removed and various salts and ions present in the effluent are removed in the process of treatment. Therefore, the treated water recovered is demineralized water, which is classifiable under HSN 2201 and is liable for GST rate of 18% under S. No. 24 of Schedule III of Notification No.01/2017-CT (Rate) dated 28.06.2017 and the benefit of exemption from payment of GST as per SI. No. 99 of Notification No. 02/2017-CT (Rate) dated 28.06.2017, cannot be claimed by them. 99. 2201 Water other than aerated, mineral, purified, distilled, medicinal, Ionic, battery, de-mineralized and water sold in sealed container. Sl.No. Minerals RO Feed RO Recovered water RO Reject 1 PH 6.5 5.9 7.6 2 TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Applicant? As the question is to determine the classification of goods or services, which is within the ambit of the Authority under section 97 (2) (g) of the CGST Act, the same is taken up for decision. DISCUSSIONS FINDINGS: 6.1 We have carefully examined the statement of facts, supporting documents filed by the Applicant along with application, submissions/Additional submissions made and the comments of the Central/State Jurisdictional Authority. 6.2 The Applicant is a common effluent treatment plant engaged in rendering hazardous waste treatment and disposed services. The treated water and salt recovered during the treatment /process are being supplied to member units for their reuse. So far, they have paid tax @ 12% classifying their services under the group 99943 water treatment and disposal services. 6.3 In order to prevent pollution of River water and ground water, TNPCB has made the Zero Liquid Discharge system (ZLD in short) mandatory for all the highly polluting industries including Textile Dyeing and Bleaching industries, Tanneries etc., which use considerable amount of salt in the process and consume huge quantity of water. The ZLD system ensures recovery of water ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd bore well and other sources through Reverse Osmosis process to get purified water meant for drinking purpose. Similarly, the Advance Ruling pronounced by the Gujarat Authority for Advance Ruling is also related to purification of raw water through RO and UV technologies and selling purified water in containers. Therefore, both these rulings are not relevant to the ease of the Applicant. Further, these rulings were issued prior to the issue of Circular No. 179/11/2022, dated 03.08.2022. In the case of M/s. Kasipalayam Common Effluent Treatment Plant Private Limited, it was pronounced that, Water recovered out of effluent treatment process, is partly de-mineralized in nature for industrial use and therefore is classifiable under Heading No. 2201 as Waters described under SI. No. 24 of Annexure-III of Notification No. 01/2017 - Central Tax (Rate), dated 28-6-2017 taxable at the rate of 18 per cent GST. 6.10. Water recovered has been categorized as de-mineralized/purified water in aforesaid rulings, classifiable under Heading No. 2201 under the following entry in Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. To decide upon the taxability of effluent treated water, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said entry Sl.No. 99 in Notification No. 2/2017 - Central Tax (Rate) dated 28th June 2017 as it is demineralized water. As per the Customs Tariff Act, de-mineralized water has been grouped in chapter 28 under the heading 28.53 - Distilled and conductivity water and water of similar purity. As per explanatory notes, this heading covers only distilled water, redistilled water or electro osmotic water, conductivity water and water of similar purity, including water treated with ion exchange media, which have got special usages. 6.13. As per the standard Chemistry references, demineralized water is explained as detailed below; Demineralized water has all its mineral content almost removed. The most common DM water processes are:- 1. Deionisation 2. Distillation 3. Electro dialysis 4. Filtration using membranes (Nano filtration or reverse osmosis) De-mineralized water is obtained by passing water successively through a cation exchange (in the H+ form) and an anion exchange (in the OH- form) resin and it is free from all soluble mineral salts. The pH of demineralized water is close to 7.0 indicating that, it is neither acidic nor basic as it is almost devoid of salts. The total dissolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2201 rather than SI. No. 24 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the same heading 2201. 6.18. As per Circular No. 179/11/2022, dated 03.08.2022, issued by Ministry of Finance, regarding applicability of GST on various goods and services, it has been clarified that treated sewage water attracts Nil rate of tax. The relevant portion of the Circular stated supra, is as under:- 5. Treated sewage water attracts Nil rate of GST: 5.1. Representations have been received seeking clarification regarding the applicable GST rate on treated sewage water. Treated sewage water was not meant to be construed as falling under purified water for the purpose of levy of GST. 5.2. hi general, Water, falling under heading 2201, with certain specified exclusions, is exempt from GST vide entry at SI. No. 99 of notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017. 5.3. Accordingly, it is hereby clarified that supply of treated sewage water, falling under heading 2201, is exempt under GST. Further, to clarify the issue, the word 'purified' is being omitted from the above-mentioned entry vide notification No. 7/2022-Central Tax (Rate), dated the 13th J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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