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TMI Blog2023 (8) TMI 1555X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociation (SITRA) Textile Testing and Service Centre, test report No. V2300306 dated 09.08.2023 of Sample given for testing, in the case of the Applicant, it is seen that the recovered water contains chlorides, sulphates, Bicarbonates, etc. The TDS levels of the treated water as per the test report is 616 mg/1, which clearly shows the treated water is not demineralized as per the standard norms. From the above, it is clear that treated water cannot be construed as de-mineralized water. The treated water will not fit into sl.No.24 of Notification No.01/2017-CT(Rate) dated 28.06.2017. Also treated water is not demineralized water as claimed by them but water, without any special characters as indicated in the tariff entries - water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for reuse by the dyeing and bleaching units as a solvent and as a washing, rinsing medium. Thus, it aptly fits into Sl. No. 99 of Notification No. 02/2017, CT (Rate), dt.28.06.2017 under the heading 2201 rather than Sl.No.24 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the same heading 2201. The ultimate intention behind the effluent tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act, 2017. M/s Sirupooluvapatti Common Effluent Treatment Plant Private Limited, SF No. 632, Athuvazhi Thottam, Sirupooluvapatti Post, Tirupur, Pin.: 641 603 (hereinafter called as the 'Applicant') is registered under the GST Acts with GSTIN: 33AAJCS8719E1Z8. 2.0. In their application for Advance Ruling, the Applicant has stated, inter-alia, the following as their nature of activity proposed: (i) the Applicant is a common effluent treatment plant, set up by the various dyeing units in that area; (ii) the Applicant is planning to buy the effluents from dyeing units and that the effluents will be delivered from the dyeing units to the Applicant through pipelines; (iii) the effluent will be processed at the plant and the resultant treated water is to be sold to the dyeing units. 2.1 The Applicant has sought for advance ruling on the following questions; 1. What is the appropriate classification of the treated water that would be sold by the Applicant, after carrying out various treatment proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter. Additional fourth phase (IV) and fifth phase(V) of RO treatment is done through micron cartridge filter for desalination. RO IV & V reject is treated with Lime soda process in a Clarifier-I for hardness removal and pH correction then taken through RO VI through micro filtration for further concentration. * Final RO VI reject is treated through MEE-1, MEE-2, MEE-3 for further concentration and portion to Brine solution preparation. The MEE-1 concentrate and the MEE-2 mother liquor are sent to Brine solution preparation. Remaining RO VI reject is treated in MEE-2 & MEE-3 for further concentration and where the salt is crystallized and removed pusher centrifuge. The mother liquor from MEE-3 is dried and powdered in ATFD (Agitated Thin Film Dryer). The Brine solution is treated with Lime soda process in Clarifier II for hardness reduction, the effluent pH is corrected and distributed to member units for reuse. 3.0. The Applicant's interpretation of law/facts in respect of the questions raised, they submitted the following: * The CGST payable on supply of various goods are prescribed under Notification 1/2017-CT(Rate) dated 28.06.2017, as amended, and Notification NO.02/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. Reverse Osmosis (RO) is a process where water is demineralized by flowing under pressure through a semi-permeable membrane. The outlet of MF product is serially fed to 7 stage RO system through Micron Cartridge filter for demineralization. The inlet Total Dissolved Solids (TDS - Minerals) of RO system is around 10,000 mg/1. On demineralizing, the ETP recovers 93% of demineralized water, which is fit for reuse. * The TDS of demineralized water is 400 mg/1 only. The TDS of 7th stage RO system reject water is 1,50,000 mg/l. Some of the minerals, the percentage of which is present in RO feed and RO recovered is given below: Sl.No. Minerals RO Feed RO Recovered water RO Reject 1 PH 6.5 5.9 7.6 2 TDS mg/1 10000 150000 400 3 Calcium mg/1 120 3 1460 4 Magnesium mg/1 80 1 980 5 Sodium mg/1 4600 140 50100 6 Chloride mg/1 3500 140 30500 7 Sulphate 4000 110 61000 8 Bicarbonate 400 20 1800 * The process of treatment of the effluent water received would be converted into purified/demineralized water as all impurities are removed and various salts and ions present in the effluent are removed in the process of treatment. Therefore, the treated wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purifying the water containing the dye impurities and no change of nature of goods involved in this process. Hence, it is purely a service only. * As per the Government of India Notification No.1/ 2018 Central Tax (Rate) dated 25.01.2018, it was notified that "Services by way of treatment of effluents by a Common Effluent Treatment Plant" is taxable at 6% CGST & 6% SGST in total rate of tax is 12% (SAC-9994). Hence the classification of the supply of output as sale of goods is not correct. As per the Government of India Notification No. 1 / 2018 Central Tax (Rate) dated 25.01.2018, it was notified that "Services by way of treatment of effluents by a Common Effluent Treatment Plant" is taxable at 6% CGST & 6% SGST in total rate of tax is 12%. But Salt (HSN 2501) and water (HSN 2201) are NIL rated. Hence, classification as sale of goods is not relevant in this case. 6.0 With the above background of facts, the Applicant is before us seeking ruling on the following question: 1. What is the appropriate classification of the treated water that would be sold by the Applicant, after carrying out various treatment process on the effluent water purchased by them? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant proposes to sell the resultant products at market rates. 6.7 The first question to be examined is what is the appropriate classification of the treated water that would be sold by the Applicant, after carrying out various treatment process on the effluent water purchased by them'. The Applicant is of the view that the treated water recovered is demineralized water, which is classifiable under HSN 2201 and is liable for GST rate of 18% under S.No.24 of Schedule III of Notification No.01/2017-CT(Rate) dated 28.06.2017 and the benefit of exemption from payment of GST as per Sl.No.99 of Notification NO.02/2017-CT(Rate) dated 28.06.2017, cannot be claimed by them. 6.8 In this context, the Applicant has referred the advance rulings pronounced in the following cases. 1. M/s. Kasipalayam Common Effluent Treatment Plant Private Limited (AAR Tamilnadu 23/AAR/2021, Dated: 18.06.2021. 2. Gujarat AAR in the case of Aquaa Care (Surat) RO Technologies Pvt. Ltd. - GAAR/11/2019, Dated: 24.07.2019. 3. Karnataka AAR in the case of Water Health India Pvt. Ltd. KAR ADRG 12/2020, Dated: 18.02.2020. 6.9 The Advance ruling pronounced in the case of M/s. Water Health India Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural or artificial Natural mineral waters contain mineral salts or gases. The composition of these waters varies considerably and they are generally classified according to the chemical characteristics or their salts, e.g.: (1) Alkaline waters (2) Sulphated waters (3) Halide waters (4) Sulphuretted waters (5) Ferruginous waters Such natural mineral waters may also contain natural or added carbon dioxide. Artificial mineral waters are prepared from ordinary potable water by adding the active principles (mineral salts or gases) present in the corresponding natural waters SO as to produce waters of the same properties. (C) Aerated Waters (carbonated waters), i.e. ordinary potable waters charged with carbon dioxide gas under pressure. They are often called "soda waters" or "Seltzer" waters although true "Seltzer" water is a natural mineral water. The heading excludes sweetened or flavoured aerated waters (heading 22.02) (D) Ice and snow, i.c.natural snow and ice, and artificially frozen water. In the present case, the treated water from the effluent plant, will not fall into any of the categories above. Therefore, this trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V2300306 dated 09.08.2023 of Sample given for testing, in the case of the Applicant, it is seen that the recovered water contains chlorides, sulphates, Bicarbonates, etc. The TDS levels of the treated water as per the test report is 616 mg/1, which clearly shows the treated water is not demineralized as per the standard norms. From the above, it is clear that treated water cannot be construed as de-mineralized water. 6.15. As already discussed, treated water will not fit into sl.No.24 of Notification No.01/2017-CT(Rate) dated 28.06.2017. Also treated water is not demineralized water as claimed by them but water, without any special characters as indicated in the tariff entries. 6.16. Sl.No.99 entry in Notification No. 2/2017 Central Tax (Rate) dated 28th June 2017, includes ordinary water and excludes all special category water and the same reads as: Sl.No. Heading Description of Service Rate 99 2201 Water [other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in scaled container] Nil 6.17. Therefore, it is amply clear that, water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter coming out from Sewage Treatment Plant still contains organic and inorganic substances, such as suspended particles, grit, clays, pollutants like nitrogen, phosphorus, etc. is not pure due to presence of the said impurities and foreign elements and therefore will be eligible for exemption in terms of entry at Sl. No. 99 of Notification No. 02/2017, CT (Rate), dt.28.06.2017. 6.22. In this regard, it is observed that the process carried out by the Applicant involves conversion of effluent water into treated water to make it suitable for reuse by the member units. At the same time, the treated water cannot be put into any other usage, as the same is not completely free of impurities, bacteria and other harmful micro-organisms and chemicals. 6.23. The above facts reiterate that the ultimate intention behind the effluent treatment process is to treat the effluent water discharged by textile units to recover water, salt and other chemicals consumed during the course of dyeing and bleaching to the maximum extent possible so as to reuse the same without getting it discharged to pollute water bodies. Moreover, ZLD has been mandated by the TNPCB for all the highly polluting industries ..... X X X X Extracts X X X X X X X X Extracts X X X X
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