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.
Read AAR Order : GST on Treated Water’ obtained from STP
FULL TEXT OF THE ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASTRA
1. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
2. The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “CGST Act” and “MGST Act”] by M/s. Rashtriya Chemicals and Fertilizers Limited, 9th floor, PRIYADARSHINI, Eastern Express Highway, Sion, Mumbai- 400 022, Maharashtra (“hereinafter referred to as “Appellant”) against the MAAR order No. GST-ARA-67/2019-20/B-57 dated 09.10.2021, pronounced by the Maharashtra Authority for Advance Ruling (hereinafter referred to as “MAAR”).
BRIEF FACTS OF THE CASE
3.1 Rashtriya Chemicals and Fertilizers Limited (hereinafter referred to as the “Appellant”) is engaged in the business of manufacture and sale of fertilizers and industrial chemicals. The Appellant have its head office in Mumbai and have two manufacturing plants located in Maharashtra and have warehouses/ distribution networks across various states in India.
3.2 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.
3..3 The Appellant have set up a New Sewage Treatment Plant which became operational on 10 September 2019 (hereinafter referred to as ‘New STP’) with an objective of becoming self-dependent in meeting daily process water requirements of Trombay unit.
3.4 The Appellant have agreed to supply such treated water to Bharat Petroleum Corporation Limited (hereinafter referred to as ‘BPCL’) for use in refinery. The key terms of arrangement between the parties are stated below:-
