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TMI Blog2019 (7) TMI 1605X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 99 of Notification No. 02/2017 -Central Tax (Rate) dated 28-062017, it will not be eligible for nil rate of duty. Composite Supply or not - selling water in containers - whether selling of container and water is composite supply? - HELD THAT:- The selling water in containers is composite supply as the principal activity is selling of purified water only. X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 2017. 1.1 Provisions of Notification No 1/2017 - Central Tax (Rate) dated 28th June 2017 reads as under:- G.S.R. (E).~ In exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act; 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the central tax of- (i) 2.5 per cent, in respect of goods specified in Schedule I, (H) 6 per cent, in respect of goods specified in Schedule II, (iii) 9 per cent, in respect of goods specified in Schedule III, (iv) 14 per cent, in respect of goods specified in Schedule IV, (v) 1.5 per cent, in respect of goods specified in Schedule V, and (vi) 0.125 per cent, in respect of goods specified in Schedule VI appended to this notification (hereinafter referred to as the said Schedules), that shall be levied on intraState supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule III - 9% Sr.No. Chapter/Heading/Sub-hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eralized and water sold in sealed container]" which means treated water (aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralized) if sold in sealed container are not exempt and taxable as per Notification number 01/2017 - Central Tax Rate. But if the same is sold in non-sealed container are exempt from GST. 2.7 Business Process of the Applicant as submitted by the applicant :- i) As already mentioned in the business process in "Annexure I", the proposed activity of the applicant includes selling of water in containers as well as without containers where the customers carry container with themselves. ii) Thus as per interpretation and understanding the transaction falls under Notification Number 02/2017 - Central Tax - (Rate) dated 28th June, 2017 as the applicant is not selling the water in sealed containers they are only providing the containers for filling they don't seal it with any lid from protection. iii) The applicant has also attaching the photos of the water in container which clearly proves that the container is not sealed. Thus, with detailed submission herein above the applicant believes that the transaction of selling of water by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * now the selling of water is the principal supply, containers are used just for filling it. And thus, applicant believes that all the conditions of composite supply are satisfied, selling of container and water is composite supply and shall be taxable at the same rate at which water is taxable i.e. also exempt. The applicant M/s Aquaa Care(Surat) RO Technologies Pvt. Ltd. has also submitted the list of directors as on 15.01.2018 which are as follows: List of Director as on 15/01/2018 Sr.No. DIN Name Address Date of Appointment 1 05321726 PAWAN BMARADIA 404, Gurudev Apt, L.H. Road, Surat. 395006 16/11/2016 2 07727213 BHADRESH CHANDRAKANT JAGLAGANESHWALA A-40, Avdhut Soceity, Parvat Patia, Surat. 395010 03/02/2017 Further, the applicant M/s Aqua care(surat) RO Technologies Pvt. Ltd. Vide letter dated 19.09.2018 submitted the additional submission which is as follows: 2.10 Additional Submission of the applicant. 1.1 Regarding Question 1, i.e. 1.1.1 What is the classification when the water is sold in non sealed container and its HSN Code? i) Applicant submitted that their understanding in the matter is that any water including natural or artificial mineral wat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ✓ one of which is a principal supply ii) If the above three conditions are satisfied then the supply shall be taxable at the rate of principal supply of goods or services. Let's evaluate the provisions pertaining to composite supply in the present case:- For selling of purified water it is to be filled in some glass, bottles or containers. In case the customer carry the same with on their own there is nothing like composite supply as first condition two or more taxable supplies are not there. In case where the applicant is providing the container; * the Applicant is supplying water and for supply of water they are providing containers and hence there is supply of two or more taxable supplies; * water cannot be sold standalone without filling in the containers and thus the supply is naturally bundled and supplied in conjunction with each other in the ordinary course of business; and * now the selling of water is the principal supply, containers are used just for filling it. iii) Applicant believes that all the conditions of composite supply are satisfied, selling of container and water is composite supply and shall be taxable at the same rate at which water is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -heading/tariff item Description of Goods 99 2201 Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) As per the Notification no. 02/2017 Central Tax (Rate), - In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Schedule appended to this notification, falling under the tariff item, subheading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule, from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017)." The applicant has interpreted that as per the provisions the transaction falls under Notification 02/2017- Central Tax (Rate) dated 28.06.2017 as the applicant is not selling the water in sealed containers and thus transaction of selling of water by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Customers on Railway station/ Villages. For this purpose the company will set up water stations at the railway platform and Water ATM at the villages to supply purified water. iii) The applicant has mentioned regarding the press release dated 21.07.2016 on GST rate on goods, in which at para VII it is mentioned that water supplied for public purposes (other than in sealed container) does not attract GST. However, Circular no. 52/26/2018-GST, dtd. 09.08.2018 issued from F.No. 354/255/2018-TRU, at para 6 clarifies as below: "6.1 Applicability of GST on supply of safe drinking water for public purpose : Representations have been received seeking clarification regarding applicability of GST on supply of safe drinking water for public purpose. 6.2 Attention is drawn to the entry at S. No. 99 of notification No. 2/2017-Central Tax (Rate), dated 28-6-2017, by virtue of which water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] falling under HS code 2201 attracts NIL rate of GST. 6.3 Accordingly, supply of water, other than those excluded from Sr. No. 99 of notification No. 2/2017-Central Tax (Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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