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TMI Blog2023 (9) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... es supporting the original advance ruling have changed. 4. In terms of Section 104 of the Act, where the Authority finds that advance ruling pronounced by it under sub-section (4) of Section 98 or under sub-section (1) of Section 101 has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant as if such ruling had never been made. 5. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar 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 reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where it is subjected to activated sludge process to reduce organic load. This overflows into a secondary clarifier and the settled biomass is re-circulated back to aeration tank and excess is sent for sludge dewatering. The effluent then transferred to chlorine contact tank, where it is decoloured using liquid chlorine and then it is treated with sodium meta bi-sulphate/sodium thio sulphate to remove traces of chlorine. Then it enters the filtration system such Pressure sand filter, Micro filter, which remove suspended solids, turbidity and fines, organic, odour from effluent. * The output product is collected in the reverse osmosis feed tank. The treated effluent is fed into three stage (I,II,III) RO system for removal of dissolved inorganic salts and 80 to 85% of water will be recovered as reusable water. Additional fourth phase (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 furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udes demineralization process and therefore, the water obtained at the end of the process is demineralized water. * Demineralized water is usually made by using ion exchange, electrode ionization or membrane filtration technologies in order to create ultrapure water. In this process, removal of virtually all ionic mineral contaminants from water, so that resultant water has sufficient purity for variety of industrial applications. * The water usually contains positively charged ions as Iron, Calcium, Magnesium, Copper, Sodium and Potassium and also negatively charged ions as Chloride, Carbonate, Sulphate, Bi-carbonate, Nitrate etc. Reverse Osmosis (RO) is a process where water is demineralized by flowing under pressure through a semi-permeable membrane. The outlet of MF product is serially fed to 7 stage RO system through Micron Cartridge filter for demineralization. The 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and treated water and certificate to that effect and also detailed flow chart showing the end products. Members also asked him to submit the details of all the byproducts obtained on treatment of effluent water other than demineralized water, whether they are sold back to the dyeing units or any other third party and bills pertaining to the same. 5.0. The Central jurisdictional authority and the State jurisdictional authority have reported that, there are no pending proceedings in respect of the questions for which Advance Ruling is sought by the applicant. 6.0 With the above background of facts, the Applicant is before us seeking ruling on the following question: 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 effluent water purchased by them? 2. What is the rate of GST applicable on the said treated water which would be sold by 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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) elated 28.06.2017, cannot be claimed by them. 6.8 In this context, the Applicant has referred the advance rulings pronounced in the following eases. 1. M/s. Kasipalayam Common Effluent Treatment Plant Private Limited (AAR Tamilnadu-23/AAR/2021, Dated: 18.06.2021. 2. Gujarat AAR in the ease of Aquaa Care (Surat) RO Technologies Pvt. Ltd. - GAAR/11/2019, Dated: 24.07.2019. 3. Karnataka AAR in the ease of Water Health India Pvt. Ltd. -KAR ADRG 12/2020, Dated: 18.02.2020. 6.9 The Advance ruling pronounced in the case of M/s. Water Health India Pvt. Ltd., by the Karnataka Advance Ruling Authority is related to processing of raw water from well, pond 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 purificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ferruginous waters Such natural mineral waters may also contain natural or added carbon dioxide. Artificial mineral waters are prepared from ordinary potable water by adding the active principles (mineral salts or gases) present in the corresponding natural waters so as to produce waters of the same properties. (C) Aerated Waters (carbonated waters), i.e. ordinary potable waters charged with carbon dioxide gas under pressure. They are often called "soda waters" or "Seltzer" waters although true "Seltzer" water is a natural mineral water. The heading excludes sweetened or flavoured aerated waters (heading 22.02) (D) Ice and snow, i.e. natural snow and ice, and artificially frozen water. In the present case, the treated water from the effluent plant, will not fall into any of the categories above. Therefore, this treated water will not fit into Sl. No. 24 of Notification No. 01/2017-CT (Rate) dated 28.06.2017. 6.12. It is the claim of the Applicant that the treated water will not fall under the 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat treated water cannot be construed as de-mineralized water. 6.15. As already discussed, 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. 6.16. SI.No. 99 entry in Notification No. 2/2017 - Central Tax (Rate) dated 28th June 2017, includes ordinary water and excludes all special category water and the same reads as: SI.No. Heading Description of Service Rate 99 2201 Water [other than aerated, mineral, distilled, medicinal, ionic, battery, demineralized and water sold in sealed container] Nil 6.17. Therefore, it is amply clear that, 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. 6.18. As per Circular No. 179/11/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.06.2017. 6.22. In this regard, it is observed that the process carried out by the Applicant involves conversion of effluent water into treated water to make it suitable for reuse by the member units. At the same time, the treated water cannot be put into any other usage, as the same is not completely free of impurities, bacteria and other harmful micro-organisms and chemicals. 6.23. The above facts reiterate that 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 without getting it discharged to pollute water bodies. Moreover, ZLD has been mandated by the TNPCB for all the highly polluting industries including Textile Dyeing and Bleaching industries in order to prevent pollution of River water and ground water. Therefore, it is evident that the common effluent treatment plant has been set up in order to comply with the legislative and environment regulations thereby conserving water through recovery and reuse and not to manufacture water or chemicals 6.24. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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