9911796707
TMI Blog2024 (1) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. 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 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? 2.2 The Applicant has submitted the copy of application in Form GST ARA-01 and also submitted a copy of challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules, 2017 and SGST Rules, 2017. 2.3 The Applicant has been established as a Zero Liquid Discharge (ZLD) plant, undertaking treatment of dyeing and bleaching effluents discharged/received from their member dyeing units, so as to completely prevent discharge of any effluent into the nearby water bodies. 2.4 As per the written submissions made, their main objective is to treat the effluents generated from all its member units. The effluent water is received from the member Dyeing units through pipelines and the effluent is subjected to various treatment processes to obtain reusable water with zer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 No. 1/2017-C.T. (Rate), dated 28-6-2017, as amended, and Notification No. 2/2017-C.T. (Rate), dated 28-6-2017, as amended, provides for various exemptions from payment of CGST, for various supplies of goods. * As per the First Schedule to the Customs Tariff Act, 1975, Chapter 2201 covers "Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured; ice and snow", and thus the heading is wide enough to cover the treated water and therefore the treated water would be classifiable under Heading 2201. * Sl. No. 99 of the Notification No. 2/2017-C.T. (Rate), dated 28-6-2017 provides exemption from payment of CGST for the following description of water : 99. 2201 Water other than aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralized and water sold in sealed container. From the above, it is seen exemption is not available to certain types of water. However, the treated water proposed to be sold would be covered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 MSN 2201 and is liable for GST rate of 18% under Sl. No. 24 of Schedule III of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 and the benefit of exemption from payment, of GST as per Sl. No. 99 of Notification No. 2/2017-C.T. (Rate), dated 28-6-2017, cannot be claimed by them. 3.1 They relied upon the decision of TN AAR in the case of M/s. Kasipalayam Common Effluent Treatment Plant Private Limited (AAR Tamilnadu -23/AAR/2021) [2021 (54) G.S.T.L. 348 (A.A.R. - GST - T.N.) = [2021] 130 taxmann.com 72/87 GST 490 (AAR - Tamilnadu)], in a similar case, wherein it was pronounced that, Water recovered, which is demineralized water for Industrial use is classifiable under Heading No. 2201 as Waters described under Sl. No. 24 of Annexure-III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 taxable at rate of 18 per cent GST. They also relied on the ruling issued by Gujarat AAAR in the case of Aquaa Care (Surat) RO Technologies Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atment and disposal 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 & salt from the effluent water, thus preventing pollution of River/groundwater. 6.4 In this context, the Applicant is functioning as a common plant to treat the effluents generated in the member textile dyeing units during the dyeing and bleaching process recovering maximum quantity of water, salts and other solids which could be beneficially reused, leaving zero discharge at the end of the treatment process. 6.5 As per the submissions made, at present, the Applicant is rendering the service of hazardous waste treatment and disposal services, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f M/s. Kasipalayam Common Effluent Treatment Plant Private Limited, it was pronounced that, Water recovered out of effluent treatment process, is partly demineralized in nature for industrial use and therefore is classifiable under Heading No. 2201 as Waters described under Sl. No. 24 of Annexure-III of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 taxable at the rate of 18 per cent GST. 6.10 Water recovered has been categorized as demineralized/purified water in aforesaid rulings, classifiable under Heading No. 2201 under the following entry in Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. To decide upon the taxability of effluent treated water, it is required to analyze the aforesaid classification. The entry given under the said notification is as under : Sl. No. Heading Description of Service Rate 24 2201 Waters including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured; Ice and snow (other than Drinking water packed in 20 litre bottles) 9% 6.11 Chapter 22 - covers Beverages, Spirits and Vinegar, covers water, non-alcoholic, alcoholic beverages. More specifically, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) Demineralized 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 demincralized water is close to 7.0 indicating that, it is neither acidic nor basic as it is almost devoid of salts. The Total Dissolved Solids (TDS) value of the water depends on the amount of minerals that are dissolved in water. When minerals like calcium bicarbonate, magnesium sulphate, and sodium chloride increases then the TDS value increases. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding 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 In general, Water, falling under heading 2201, with certain specified exclusions, is exempt from GST vide entry at Sl. 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 abovementioned entry vide Notification No. 7/2022-Central Tax (Rate), dated the 13th July, 2022. 6.19 The same analogy is applicable to the case on hand. The relevant entry in Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017 is : Sl. No. Heading Description of Service Rate 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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