In re Gujarat Eco Textile Park Limited (GST AAR Gujarat)
The recent ruling by the Authority for Advance Ruling (AAR) in Gujarat regarding the classification of Zero Liquid Discharge (ZLD) treated water (RO) from Gujarat Eco Textile Park under GST has significant implications for industries.
The case involved M/s Gujarat Eco Textile Park Limited, which established a Common Effluent Treatment Plant (CETP) for treating wastewater generated by industries. Additionally, they operated a ZLD plant, where the effluent from CETP underwent ultrafiltration and reverse osmosis to produce treated water (RO) sold to industries for manufacturing processes.
The key question revolved around the GST classification of this treated water under Chapter 2201. The applicant argued that it fell under Schedule-III, Entry 24 of Notification No. 01/2017-CT(R), while the AAR ruling clarified that it should be taxed at 18% under Schedule-III, Entry 24 of Notification No. 01/2017-CT(R).
To support their decision, the AAR examined various types of water mentioned in GST notifications, including aerated, mineral, distilled, medicinal, ionic, battery, and de-mineralized water. They concluded that the ZLD treated water (RO) had minimal dissolved minerals, making it akin to de-mineralized water, which is taxable.
Conclusion: In conclusion, the AAR ruling clarified the GST classification of ZLD treated water (RO) from Gujarat Eco Textile Park. Industries procuring this water will need to account for the applicable GST rate of 18%. This ruling underscores the importance of understanding the nuances of GST classifications for various products and services in industrial operations.
