Case Law Details
In re Amarnath Aggarwal (GST AAR Haryana)
Get insights into GST implications on water supply activities. Understand SAC code 996921 and applicable 18% GST rate. Read the AAR Haryana ruling.
The main issue is whether the activity of the supply of water to the residents of this society is a taxable event or not under the GST Act, 2017? In this regard, it is observed by the authority that as per the notification no. 12/2017 dated 28.06.2017, Pure Services (excluding works contract services) or other composite supplies involving supply of other goods provided to the local authority by way of any activity in relation to any function entrusted to municipality under article 243 W of the constitution of India are nil rated. Whereas the applicant is a Private Limited Company registered under the companies Act, 2013 and not entitled for the said exemption.
AAR held that activity of water distribution system by the applicant to the residents of the Complex is covered under definition of business as enumerated above and it is a taxable supply. The scope of the supply under the GST Act is quite vast and encompasses all the supplies of goods and services which are not explicitly exempted by the government. The water distribution system is an independent business enterprise and here in the present case it is part of business activities of the applicant. It can also be said that it is a supply which is being done by the applicant for the furtherance of business.
The relevant entry no. 3 of Pure Services in the exemption Notification No. 12-CT(R) dated 28.06.2017which got amended on 18.11.2021 w.e.f 01.01.2022 is as: Pure Services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243 G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution.
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