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TMI Blog2023 (3) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... s and services which are not explicitly exempted by the government. The water distribution system is an independent business enterprise and here in the present case it is part of business activities of the applicant. It can also be said that it is a supply which is being done by the applicant for the furtherance of business - it can be construed that for any supply to be covered under the Pure Services that there should be no supply of goods, the recipient should be Central government/State government/Union territory/ Local Authority and services should be by way of any activity in relation to any function entrusted to a panchayat under article 243G of the constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution. Thus, the activity undertaken by the applicant cannot be considered as Pure Services which has been mentioned at serial no. 3 in the Notification No. 12-CT(R) dated 28.06.2017 wherein the services are nil rated. No doubt, the supply of water supply/water distribution system by the Municipal Committee / Panchayat/Local Authority or by any Government agency is exempted under the provisions of the GST Act, 2017. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above provisions and the case is being heard on merits. Statement of facts as per ARA-01 The applicant is a registered taxpayer under the CGST Act, 2017. The taxpayer is a Pvt. Ltd. company. We are developers and developing residential complexes which includes, plots, commercial shops, group housing flats. We are doing various activities under this GST registration. We are collecting GST as applicable from the customers and depositing the same with the department after adjusting the input tax credit available to us. We have our own arrangement of water supply activities which as under: We have laid water supply pipe lines, over head tanks, tubewells and water treatment yard in the complexes. The underground water is being lifted through Tubewell to Treatment yard and after treatment the water is again lifted to overhead tank through motor pumps and then supplied the same to the residents through pipe lines. The water reading meters have installed for individual residents. The consumption of water reading is taken periodically and the intimation of consumption of water is informed to the consumers on prescribed rate. The invoice cum Receipt is issued to the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now, the main issue is whether the activity of the supply of water to the residents of this society is a taxable event or not under the GST Act, 2017? In this regard, it is observed by the authority that as per the notification no. 12/2017 dated 28.06.2017, Pure Services (excluding works contract services) or other composite supplies involving supply of other goods provided to the local authority by way of any activity in relation to any function entrusted to municipality under article 243 W of the constitution of India are nil rated. Whereas the applicant is a Private Limited Company registered under the companies Act, 2013 and not entitled for the said exemption. The relevant provisions under the CGST Act, 2017 are as under:- Section 2(17) ''business includes,- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the expression supply includes,- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; [and] (c) the activities specified in Schedule I, made or agreed to be made without a consideration; [***] (2) Notwithstanding anything contained in sub-section (1),- (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. Section 9 Levy and collection.- (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n:- From the above discussions and legal provisions applicable in the case it can be said that the activity undertaken by the applicant cannot be considered as Pure Services which has been mentioned at serial no. 3 in the Notification No. 12-CT(R) dated 28.06.2017 wherein the services are nil rated. No doubt, the supply of water supply/water distribution system by the Municipal Committee / Panchayat/Local Authority or by any Government agency is exempted under the provisions of the GST Act, 2017. It is also to be noted unless there is any express/explicit option is given in the exemption notification by the Government, the concessional or exempted rate of tax cannot be availed by any taxpayer. And there is no such exemption given under the provision of the Act for the said activity to the residential societies. So, it can be concluded that the activities of water distribution system/water supply services being undertaken by the applicant in the present case is a taxable supply under the CGST/HGST Act, 2017. 7. Ruling:- Questions Answers 1. Whether the water supplies activities done by the applicant are cov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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