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TMI Blog2022 (4) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... long with other impurities. Thus, it can be safely concluded that the resultant water is not pure due to presence of the said impurities and foreign elements - Thus, it is adequately clear that water containing anything apart from the Hydrogen and Oxygen will not be construed as pure water. It is further observed that even potable water, which is fit for human consumption, will not be treated as pure water due to the presence of various minerals and ether elements like chlorine, which are added to it to kill the harmful micro-organisms that causes diseases. All these groups of specific water mentioned under the exclusion clause of the relevant entry are supplied in the packaged form, i.e., in the sealed container, in order to preserve their characteristics and specificity, while the same is not the case with the impugned product, i.e., STP treated water, which are supplied through pipelines without any such concerns - it is amply clear that the term purified , mentioned under the exemption clause of the relevant entry, will definitely not include the STP treated wager. Hence, the impugned product, i.e., STP treated water, is rightfully eligible for exemption under entry at Sl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be in accordance with the parameters set by BPCL; The Appellant is under obligation to provide daily analysis report of the treated water. 3.5 The process involved in treatment of sewage water is stated below for ease of reference: Steps Process involved Step 1 Receipt of sewage Step 2 Removal of suspended particles through screen chamber Step 3 Inorganic grit having higher specific gravity is removed from sewage Step 4 Remove floating and grit like impurities from sewage and increase the life of rotating equipment Step 5 Removal of Nitrogen and Phosphorous called pre-anoxic tank Step 6 Biological process that uses oxygen to break down organic matter and remove other pollutants like nitrogen and phosphorus Step 7 Converts the organic matter into carbon dioxide and new biomass Step 8 Air blower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-8 10 Oil and Grease, ppm Not traceable Not traceable 11 Ammonical Nitrogen as N, ppm Not traceable Not traceable 12 Bacteria Traceable Not traceable 13 Virus Traceable Not traceable 14 E-coli Traceable Not traceable 3.8 From the above parameters, it can be seen that while MCGM water can be used for drinking purposes as well as for other purposes, the treated water can be used only for specified industrial use as the same contains impurities making it unfit for drinking purpose. It is pertinent to note that the Appellant would have to undertake ultraviolet treatment on such treated water to make it free from all impurities and make it suitable for drinking purpose. 3.9 With the above background of facts, the Appellant had preferred an application for Advance Ruling under Section 97 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperties of processed water generated from the sewage is different than the properties of the original sewage water received in the STP plant. Therefore, it was held that Treated Water is purified sewage water and since it is purified water, the same will not fall under Sr. No. 99 of Notification 02/2017-Central Tax (Rate) dated 28 June 2017. 5. Being aggrieved by the said impugned order, the Appellant has filed the present appeal before the Maharashtra Appellate Authority for Advance Ruling (hereinafter referred to as the MAAAR ) on the following grounds: Grounds of Appeal 5.1. That the water obtained from STP is not purified water, and is thus, eligible for exemption from GST under SI. no. 99 of Notification 02/2017 - Integrated Tax (Rate) dated 28.06.2017. 5.2. That to understand the scope of the exemption notification, it would be relevant to understand the meaning of the term Water and what it covers. Since, the term Water has not been defined in the GST Law, reference has been made to the dictionary meaning of the word Water from the law lexicon, which has been reproduced herein below: Water covers more than seventy percent of the earth s sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial characteristics and specialized uses such as they are used in aerated drinks, medicinal/ health uses, automotive cooling system, sterilization, laboratory application, car battery, etc. However, as the term purified has not been defined, it is not clear whether the process carried out by the Appellant to convert sewage water into water fit for industrial consumption can be said to be covered under purified water . 5.8. In the case of the Appellant, the process essentially involved is removing bio-waste, grit and removing undesirable chemicals, biological contaminants, suspended solids, and gases from sewage water. The goal is to obtain water for use in the factory of the Appellant as well as, if available in surplus, then the same shall also be sold for usage as an Industrial Input. 5.9. That as the words purified water have not been defined under the GST Law, then applying the legal principle of noscitur a sociis , the meaning of the accompanying words of the term purified should be looked into to derive the intent of the usage of the words after the phrase other than in SI. No. 99 of the Notification No. 02/2017-I.T. (Rate) dated 28.06.2017. The words, aerate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atment on such treated water to make it free from all impurities. Therefore, it can be safely concluded from the above ruling that supply of treated water to BPCL would construe to be supply of raw water, and nothing more, and hence falling under SI. No. 99 of the Notification No. 02/2017-Integrated Tax (Rate), and thereby, qualify for exemption from the levy of GST. 5.13. It is submitted that raw water obtained from ground (well/pond/bore well) and rain cannot be used in its natural form for any purpose without any minimal treatment to it. It is a general practice across the globe that water would need to be processed to the extent required for the specific end use. Basis the generic meaning of purified water, any water on which any treatment is done would amount to purified water. If that be the case, no supply of water would be eligible for such exemption as every water would be subject to minimal treatment and would fall under the meaning of purified water and be excluded from the exemption entry. In such cases, the intention of the Government to grant exemption for supply of water would be defeated wholly. 5.14. Treated water supplied by the Appellant is not sold in seal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he similar band as the rates under the erstwhile indirect taxes (i.e., Central excise, VAT, etc.). In this connection, the Appellant have cited the exemption provided to the manufacture of Waters not cleared in sealed containers under the erstwhile Central Excise Tariff Act, 1985. They have also referred to the Maharashtra VAT Act, 2002, wherein Water was covered under Schedule A which is for NIL rated goods. It is further submitted that even in MVAT regime, there was no VAT on sale of treated water in the State of Maharashtra, the relevant entry is reproduced below: Schedule A- Maharashtra VAT Act. 2002: Sr. No Name of the commodity Conditions and exceptions Rate of Tax 49 Water other than,- Nil (a) aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized water, and (b) water sold in sealed container. (c) water for injection. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance upon Wikipedia which provides that Water treatment is any process that improves the quality of water to make it appropriate for a specific end-use. ... Water treatment removes contaminants and undesirable components, or reduces their concentration so that the water becomes fit for its desired end-use. Thus, the Department, relying upon the meaning of the Water Treatment provided in the Wikipedia, contended that the water obtained from Sewage Treatment Plant can be considered as purified water . 6.3. The Department has further stated that Sewage Treatment Plant operated by the Appellant undertakes processes of screening, grit removing, nutrient removing, aeration, Reverse Osmosis on the sewage water. This amounts to treating water and purifying it. Basis this, the Department has contended that the Treated Water obtained from STP (Classifiable under Chapter 2201) will not be eligible for exemption from GST in terms of entry at SI. No. 99 of the Notification No. 02/2017-C.T. (Rate) dated 28.06.2017, and the same will attract GST at the rate of 18% in terms of the entry at SI. No. 24 of Schedule III to the Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 having the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstwhile tax regime, and therefore, the said product, i.e., the STP treated water will not attract any GST under the GST regime too. In this regard, the Department has contended that the said speech of the Hon ble Finance Minister as well as the Minutes of the GST Council will not hold precedence over the legislation formulated and passed by the Parliament, and hence, the Appellant s contention does not hold any water. PERSONAL HEARING 7.1 Personal hearing in the matter was held on 25.02.2022 in the virtual mode, which was attended by Shri Santosh Sonar, on behalf of the Appellant as well as by the jurisdictional officer. Shri Sonar reiterated the earlier submissions made while filing the Appeal under consideration. 7.2 Shri Sonar, in the aforesaid hearing, contended that the impugned product, i.e., the STP Treated Water, is exempt under the GST law in terms of the provisions of entry at SI. No. 99 of the Exemption Notification No. 02/2017-C.T. (Rate) dated 28.06.2017, having description as Water [other than aerated, mineral, purified, distilled, medical, ionic, battery, de-mineralized and water sold in sealed container] . Shri Sonar further submitted that since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant are supplying the STP treated water, can use normal drinking water in place of the impugned treated water, however, due to the scarcity of the normal drinking water supplied by MCGM, they are bound to use the impugned STP treated water for their industrial purposes. Therefore, they are not using the STP treated water for any special purposes as the normal drinking water would have used for the same purposes. 8.4 It has been further submitted that normal drinking water supplied by MCGM is purer than the impugned treated water as the impugned water contains various impurities and contaminants, such as virus, bacteria, E-coli, etc. They further contend that, if such water supplied by MCGM is not liable to GST, being water fit for human consumption, the STP water, which is not purified, cannot be construed as purified water , and made liable to GST. DISCUSSIONS AND FINDINGS 9. We have carefully gone through the appeal memorandum encapsulating the facts of the case and the grounds of the appeal along with all the additional submissions made by the Appellant during the course of the personal hearing proceedings. We have also examined the impugned Advance Rulin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid notion is also supported by the Tamil Nadu AAAR order in the case of M/s. New Tirupur Area Development Corporation Limited (ORDER-in-Appeal No. AAAR/17 18/2021 (AR), wherein the Appellate Authority inter alia held as under: In chemical terms, purified water is pure H20 and only contains Hydrogen and Oxygen and no minerals; Distilled water is the most common form of pure water. 15. Thus, it is adequately clear that water containing anything apart from the Hydrogen and Oxygen will not be construed as pure water. It is further observed that even potable water, which is fit for human consumption, will not be treated as pure water due to the presence of various minerals and ether elements like chlorine, which are added to it to kill the harmful micro-organisms that causes diseases. 16. Further, on application of the legal construction of noscitur a sociis to derive the meaning of the expression purified , which has not been defined under the GST law, it is seen that all the expressions of the exclusion clause of the relevant entry surrounding the word purified have got certain specific characteristics and usage. That is, these water at their respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should also not be liable to tax under GST regime. 18. In this regard, we intend -.0 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 201 8, 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. 19. Thus, in view of the above discussions and findings, we pass the following order: ORDER 20. We, hereby, set aside the Advance Ruling Order No. GST-ARA-67/2019-20/B-57 dated 08.09.2021 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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