2021 (3) TMI 450 - AAR - GST

Scope of Advance Ruling application - Levy of GST - supply of safe drinking water for public purpose by Chennai Water Desalination Plant Limited (CWDL) to Chennai Metrowater Supply and Sewerage Board (CMWSSB) - HELD THAT - It is evident that an applicant can seek an Advance Ruling only in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103 (1) of the GST Act, the ruling is binding only on the applicant and the concerned officer or the jurisdictional officer of the applicant. In the case at hand, the applicant is the recipient of the services and not supplier of such service. The application is not admitted, under Section 98(2) read with Section 95(a) of the CGST Act, 2017/TNGST Act, 2017.

Summary

Issues:
1. Applicability of GST on supply of safe drinking water for public purpose by Chennai Water Desalination Plant Limited to Chennai Metropolitan Water Supply and Sewerage Board.

Analysis:
The case involved an application for advance ruling by Chennai Metropolitan Water Supply and Sewerage Board (Applicant) regarding the applicability of GST on the supply of safe drinking water by Chennai Water Desalination Plant Limited. The Applicant sought clarification on whether GST is applicable on the supply of water received from the desalination plant. The Applicant contended that the exemption under Notification 2/2017-C.T. (Rate) dated 28/06/2017 for water (other than specific types) applied to their situation. They also referenced a clarification circular on the applicability of GST on safe drinking water for public purposes.

The Applicant argued that Chennai Metropolitan Water Supply and Sewerage Board should be treated as a governmental authority, as per Notification 12/2017-C.T. (Rate), and referred to relevant definitions under the Integrated Goods and Services Tax Act. They highlighted the modification in the definition of "governmental authority" through Notification No. 32/2017-Central Tax (Rate) dated 13.10.2017. The Applicant further relied on AAR Tamil Nadu ruling order to support their claim that they should be considered a government authority.

During the virtual hearing, the Applicant was informed that an advance ruling could only be sought for supplies being made or proposed to be made, not for the recipient of services. The Authority noted that the applicant sought a ruling on the liability to pay tax on the supply made to them, not by them. Referring to relevant sections of the CGST and TNGST Act, the Authority concluded that an advance ruling can only be sought in relation to supplies undertaken or proposed by the applicant. Since the Applicant was the recipient of the service in question, the application was rejected on the grounds of inadmissibility.

In the final ruling, it was stated that the application was not admitted under Section 98(2) read with Section 95(a) of the CGST Act, 2017/TNGST Act, 2017 due to the reasons mentioned in the preceding analysis.