Case Law Details
Chennai Metropolitan Water Supply and Sewerage Board Vs Additional Commissioner (Madras High Court)
In the case of Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) vs Additional Commissioner (Madras High Court), the dispute revolves around the imposition of Goods and Services Tax (GST) on the services provided by CMWSSB. CMWSSB, established under Tamil Nadu legislation, is responsible for water supply and sewerage management in Chennai. The crux of the legal challenge lies in whether CMWSSB’s activities are exempt from GST under relevant notifications.
The litigation originated from an order dated 22nd December 2023, which levied substantial GST, interest, and penalties on CMWSSB. The Additional Commissioner’s order contended that CMWSSB’s services, including distribution of purified water, were taxable under GST, specifically under Heading 9969.
CMWSSB, through its counsel, argued for exemption under various GST notifications. They cited Notification No. 12/2017 and Notification No. 2/2017, both dated 28th June 2017, which exempt services provided by governmental entities and services related to water supply respectively. Additionally, they referenced a clarification issued on 9th August 2018, reinforcing the exemption for providing drinking water for public purposes. CMWSSB asserted that the order imposing GST was unsustainable under these provisions.
The legal battle also addressed whether CMWSSB’s provision of purified water through tankers to commercial entities constituted a composite supply taxable under GST. The Additional Commissioner justified the GST levy by categorizing CMWSSB’s services as composite supply, taxable at 18%, under GST laws.
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