Case Law Details
In re Mannarai Common Effluent Treatment Plant (P) Limited (GST AAAR Tamilnadu)
The recent decision by the Appellate Authority for Advance Ruling (AAAR) in the case of Mannarai Common Effluent Treatment Plant (P) Limited sheds light on the classification of water sold under the Goods and Services Tax (GST) regime. The AAAR directed the Authority for Advance Ruling (AAR) to re-examine the matter, emphasizing the need for a thorough reconsideration in light of new evidence presented.
Background: Mannarai Common Effluent Treatment Plant (P) Limited, a registered entity under the GST Act, sought clarification on the classification of its output, particularly water sold after treating effluents from dyeing units. The company’s application for an advance ruling questioned whether the classification of water under heading 2201, as specified in Notification No.2/2017-Central Tax (Rate) dated 28.06.2017, was appropriate.
The AAR, in its order dated 19.06.2023, classified the output as the sale of goods and upheld the classification of water sold by the appellant under heading 2201, with a NIL rate of tax. Dissatisfied with the ruling, Mannarai Common Effluent Treatment Plant (P) Limited appealed to the AAAR, citing various grounds, including discrepancies in the AAR’s decision and the failure to consider crucial aspects of the processing carried out by the company.
Appellant’s Arguments: During the personal hearing before the AAAR, the appellant presented additional submissions, including a test report from the South Indian Textile Research Association (SITRA) and a consent order from the Tamil Nadu Pollution Control Board. These documents highlighted the industrial use and specific restrictions on the reuse of the treated water, challenging its classification under heading 2201.
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