Case Law Details
In re Rashtriya Chemicals and Fertilizers Limited (GST AAAR Maharashtra)
The Appellant have a Sewage Treatment Plant (‘STP’) at its Trombay premises. This plant uses sewage water and converts it into water for use in the factory for manufacture of the fertilizers.
The Appellant has also contended that it has never been the intention of the Government, i.e., either Central Government or State Government, to levy any indirect tax on water of general purposes. In this regard, they have stated that even under the erstwhile indirect tax regime, no tax, whether in the nature of Central Excise or in the nature of VAT, was leviable on the water of general purposes, hence the supply of STP treated water was not subject to any indirect tax under the erstwhile tax regimes. Basis this contention, they have argued that the said impugned product, i.e., STP treated water, will also not be liable to tax even under the GST regime. They have further contended that since the impugned product was not subject to any indirect tax under the erstwhile tax regime, the same should also not be liable to tax under GST regime.
In this regard, we intend t0 agree with the Appellant’s contention in as much as that the Government, whether the Central Government or State Government, has never intended to tax water of general purposes. Even under the GST regime, Government has clarified 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. Thus, by applying the canon of “purposive construction”, which gives effect to the legislative purpose/intendment, we are inclined to hold that the impugned product, which can aptly be construed as water of general purpose as discussed earlier, is eligible for exemption under the relevant entry at Sl. No. 99 of the exemption notification no. 02/2017-C.T. (Rate) dated 28.06.2017.
AAAR Set aside the MAAR order No. GST-ARA-67/2019-20/B-57 dated 09.10.2021, passed by the Maharashtra Advance Ruling Authority, and hold that STP treated water will be eligible for exemption in terms of entry at Sl. No. 99 of the Exemption notification no. 02/2017-C.T. (Rate) dated 28.06.2017. Thus, the Appeal filed by the Appellant is allowed.
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