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TMI Blog2024 (7) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... y) by M/s. Greater Visakhapatnam Smart City Corporation Limited (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: 1. M/s. Greater Visakhapatnam Smart City Corporation Limited, (Hereinafter referred to as "applicant") It is a limited company incorporated under the Companies Act, 2013 at the city level, in which the state and the urban local body (GVMC) are the promoters with 50:50 equity share holding as per G.O.MS.No.43 2. In June 2015, the Government of India ("GOI") initiated "Smart City Mission", as a part of which Special Purpose Vehicles ("SPV") are created. The SPVs will Plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the Smart City development projects. Each Smart City will have a SPV which will be headed by a full time CEO and have nominees of Central Government, State Government and Urban Local Bodies ("ULB") on its Board. d. GVSCCL is one of such Special Purpose Vehicles (SPV). 3. The Vizag (Visakhapatnam) Municipality was set up as early as in 1858. The Vizag (Visakhapatnam) Municipality was formed in order to fulfill the basic infrastructural needs of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nicipal Administration & Urban Development Department, Go AP, a TRIPARTITE AGREEMENT FOR THE SUPPLY OF BULK WATER TO HPCL had been executed on 29th March, 2019 between GVSCCL, and HPCL in which the parties agreed that the rights and obligations of GVMC Under the Executed Agreements shall stand transferred and novated in favour of GVSCCL pursuant to this Agreement and that GVSCCL shall undertake, comply with and perform the said obligations of GVMC under the Executed Agreements. 8. Post novation of the rights and obligations of GVMC in favour of GVSCCL pursuant to current agreement, the Parties now agree to the following revised understanding in relation to the supply of water to HPCL: i. Instead of clear water supply from GVMC as per the Previously Executed Agreements, HPCL has agreed to accept 36.2 LIGD (16 46 MLD) of Product from GVSCCL, which GVSCCL shall supply to HPCL at the rate of Rs. 57/- per KL (inclusive of all taxes & charges as applicable). Cost to HPCL for the Product will be only Rs 57/- per KL (all inclusive). ii. In addition to the above, HPCL has requested and GVSCCL has agreed to supply additional 30 LIGD (13.64 MLD) of Product to HPCL Thus, a total of 66.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Act, 2017 or CGST Rules, 2017 may be considered as a reference to APGST Act, 2017 or AP GST rules, 2017 or IGST Act, 2017 also as it contains similar provisions 2. Applicant understands that the activity undertaken by Applicant falls within the scope of the 'supply' as defined under Section 7 of CGST Act, 2017 (which was made applicable to IGST) and also under Section 7 of AP GST Act, 2017. 3. Notification No. 1/2017-C.T (Rate) dt. 28 06.2017 was issued to prescribe rare of tax under the CGST Act. Similar notifications are also issued under the SGST and IGST Acts for prescribing rate of tax on supply of goods and services under relevant Acts. Entry relating to water was notified in Schedule Ill of the Notification at Serial No. 24. The entry in notification is reproduced below: S.No Chapter /Heading/Sub-heading /Tariff item Description of Goods Rate % (1) (2) (3) (4) 24 2201 Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured 9 4. Entry 24 of Schedule Ill of Notification No. 1/2017 C.T.(Rate) dtd. 28-06-2017 which relates to "Water" was subject to amendment vide Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government 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 Nil 8. We also rely on the Government Clarification that its intention of not levying GST on the supply of general-purpose water by way of issuance of the CBIC Circular No. 52/26/2018 dated 09 August 2018, wherein it has been clarified that supply of drinking water, for public purposes, if not supplied in sealed containers, is exempted from GST 9. Thus, by applying the canon of "purposive construction", which gives effect to the legislative purpose/intendment, applicant is of the view that the Treated water supplied by it to HPCL for Industrial purpose is eligible for exemption under the relevant entry at SI. No. 99 of the exemption notification no. 02/2017-C.T. (Rate) dated 28.06.2017 6. Personal Hearing: The proceedings of Personal Hearing was conducted on 02.04.2024, for which the authorized representative, M. Ravi Teja, Charted Accountant and K. Malikarjun, Charted Accountant and reiterated the submissions already made. 7. Discussion and Find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGD (20.46 MLD) of the clear water to HPCL. However, going forward, once the project Facility is operational, GVSCCL shall supply 36.2 LIGD (16.46 MLD) of Recycled (treated) water (hereinafter referred to as the Product) which shall replace 36.2 LIGD (16.46 MLD) of clear water being supplied by GVMC presently and GVMC shall continue to supply only 8.8 LIGD (4 (MLD) of clear water to HPCL. The applicant has raised a specific questions asked about such 'treated water' which is the forward supply of the applicant. We find that 'water' is covered under Chapter heading 2201 of GST Tariff. We also find that there are two schedule entries for 'water' under Chapter heading 2201 under the CGST Act. The first entry no. 99 of the Notification No. 02/2017 Central Tax (Rate), Dt. 28-06-2017 which is an exemption notification. The second is Entry No. 24 of the Notification No. 01/2017-Central Tax (Rate) dt. 28-06-2017. Notification No, 02/2017-Central Tax (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: - S.No Chapter /Heading/Sub-heading /Tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Contracted Quantity of Clear Water consumed in a month is less than 60% of Contracted Quantity of Clear Water. * HPCL will be charged for actual quantity of Clear Water consumed in a month if it varies between 60% and 100% of Contracted Quantity of Clear Water, reckoned per month at the rate of Rs. 60/- per KL or at such rate as may be applicable from time to time. * HPCL will be charged for additional Clear Water quantity consumed, over and above the Contracted Quantity of Clear Water, reckoned per month at the rate of Rs. 120/- per KL. * HPCL will be charged for actual consumption of Clear Water even though it is less than the 60% of Contracted Quantity of Clear Water reckoned per month, if GVMC is solely responsible for supply of less than 60% of Contracted Quantity of Clear Water. * HPCL will be charged for maintenance of meters, instrumentation and automation etc. at the rate of 0.75% af the monthly bill, which is subject to revision as and when necessary. * The existing rate per KL of Clear Water consumed shall be revised as and when deemed necessary by the governing council of GVMC from time to time. * HPCL will be informed of the revision in Supply Price well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of different type of waters which are to be covered under the said St. No. 24. Thus, it is clear that different type of waters are covered in Entry No. 24, prescribed as "waters" and the same excludes the entries of 'water' covered under Sr. No. 99 of Notification No. 02/2017-C.T. (R) dated 28.06.2017 and Entry 46B of Schedule II of Notification No. 06/2018-C.T. (Rate) dated 25.01.2018. In view of the above discussions, we agree with views of applicant and hold that the impugned goods, called as "Sewerage Treated Water", is purified water. In view of the above discussions, we pass an order as follows: RULING (Under Section 98 of Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017) Question: Whether GST applicable on the Sewerage water treated by GVSCCL and supply. of Treated Water to various industries by GVSCCL? Answer : The impugned goods i.e water , subject to the specification and utility submitted by the tax payer falls under Sr. No. 99 of Notification No. 02/2017-C.T. (R) dated 28.06.2017 Question : If yes, the rate of Tax applicable Answer : The rate of tax NIL as per Notification No. 02/2017-C.T. (R) dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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