18% GST payable on De-mineralized Water for Industrial Use: AAR [Read Order]

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that 18% GST payable on De-mineralized water for Industrial use.

The applicant, Kasipalayam Common Effluent Treatment Plant Private Limited has stated that they are an effluent treatment plant promoted by the dyeing units. They plan to buy the effluents from the dyeing units. The effluents will be delivered from the dyeing units to them through pipelines. The effluent will be processed at the plant and the resulting products water, sulphate solution, and brine solution will be sold at market rates. The delivery will be made either through pipelines/lorry. As per the norms of the Pollution control board, the resulting products can be sold to any member unit.

The applicant sought the advance ruling on the issue of Whether the classification of the supply of outputs as the sale of goods is correct; whether the classification of water sold as Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized, and water sold in a sealed container) under Heading 2201 is correct; whether the classification of effluent purchased from dyeing as other wastes from chemical or allied industries (3825 69 00) is correct.

The coram of Kurinji Selvaan V.S. and Senthil Velavan B. ruled that in the proposed Modus of purchase of ‘Raw effluent’, treat it on own account and supply the outputs at market rates, the classification of supply of outputs as sale of goods is correct. The classification of Water recovered, which is demineralized water for Industrial use is classifiable under CTH 2201 as Waters described under S.no.24 of Annexure -III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017.

To Read the full text of the Order CLICK HERE

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