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2020 (3) TMI 1043 - AAR - GSTExemption from GST - supply of purified water to public in empty unsealed cans - Entry No.99 of the Notification No. 2/2017 - Central Tax (Rate) dated 28th June, 2017 - HELD THAT - On perusal of the aforesaid Circular No. 52/ 26/2018 dated 09th August 2018, and entry No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 and the nature of the activity carried out by the applicant, it was observed that applicant supplying purified drinking water to the general public at reasonable price after removing all the physical, chemical and biological impurities in unsealed containers which are brought by the public themselves. In the above said circular it is clearly mentioned that other than those excluded from the SI. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06-2017, would attract GST at NIL rate. In the instant case, applicant supplying purified drinking water to urban under-served people across various metro cities by installing the community water system. In the process applicant removes suspended solids, organic matter, chlorine, obnoxious taste and smell from raw water and then sent to Reverse Osmosis membranes to remove total dissolved solids, bacteria and pathogens. During this process raw water converted into purified drinking water and this purified drinking water is supplied to the public - the word and used before the water sold in sealed container in the Sl. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 is disjunctive nature and lays down that Water sold in a sealed container is the another type of water excluded from the said entry along with the aerated water, mineral water, purified water, distilled water, medicinal water, ionic water, battery water, de-mineralized water. Therefore, supply of purified water whether in sealed container or unsealed container not entitled for GST exemption as the purified water excluded from the Sl. No. 99 of notification No. 2/2017-Central Tax (Rate) dated 28.06.2017. Thus, supplying of purified drinking water to the general public in an unsealed container is not entitled for exempt from GST.
Issues Involved:
1. Whether supply of purified water to the public in empty unsealed cans is exempt under GST law. Issue-wise Detailed Analysis: 1. Whether supply of purified water to the public in empty unsealed cans is exempt under GST law: Applicant's Interpretation of Law: - The applicant referenced Entry No. 99 of Notification No. 2/2017 - Central Tax (Rate) dated 28th June 2017, which exempts the supply of water, except for certain types including aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized, and water sold in sealed containers. - The applicant argued that the term "water sold in sealed container" should be read in conjunction with other types of water listed, implying that purified water in unsealed containers should be exempt from GST. - They cited the Law Lexicon dictionary and the case of Sukhnandan V. Suraj Bali, which emphasized the conjunctive use of the word "and." - The applicant also referred to Circular No. 52/26/2018 dated 9th August 2018, which clarified that water supplied for public purposes, if not in sealed containers, is exempt from GST. Findings and Discussion: - The authority reviewed the provisions of the CGST and SGST Acts, which are similar except for a few specific provisions. - The applicant entered into agreements with local panchayats/municipalities to supply purified water to the public through Community Water Systems (CWS) at an economical price. - The water treatment process includes removing suspended solids, organic matter, chlorine, and pathogens, resulting in purified drinking water. - The purified water is supplied in unsealed containers brought by the public, for which the applicant charges a nominal fee. - The authority examined the relevant notification and circular, noting that the exemption applies to water other than those specifically excluded, including purified water and water sold in sealed containers. Legal Interpretation: - The authority noted that the word "and" in the notification should be interpreted in its ordinary grammatical sense, which is conjunctive. - However, the Supreme Court in S.G. Glassworks Private Limited vs Collector of Central Ex., Nagpur, and the Allahabad High Court in Sukhnandan V. Suraj Bali, indicated that "and" could be read as disjunctive based on context to avoid absurdities. - Applying this principle, the authority concluded that "water sold in sealed container" is a separate category from other types of water listed, meaning purified water, whether in sealed or unsealed containers, is excluded from the exemption. Conclusion: - The supply of purified drinking water in unsealed containers is not entitled to GST exemption as purified water is specifically excluded from the exemption list in Entry No. 99 of Notification No. 2/2017-Central Tax (Rate) dated 28th June 2017. Ruling: - The supply of purified drinking water to the public in empty unsealed cans is not entitled to exemption from GST.
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