The applicant is a private limited company incorporated in the year 2006 also registered under GST, Act 2017 of Karnataka and an applicant is a subsidiary of Water Health International, United States of America.
The applicant is engaged in the business of supplying purified water in unsealed form by filling customer empty cans which is being brought by the customer in 20 litre unsealed cans through a piped network to establishments. The applicant has entered into an agreement with local panchayats/municipalities by signing Memorandum of Understanding for the supply of purified water to the general public with some terms and conditions.
The relevant terms and conditions of the said agreement were to supply purified water to urban underserved people across various metro cities by installing a community water treatment plant at an economical price.
CWS shall be designed to treat 21000,44000 and 65000 litres of water per day using the filtration process of removal of physical, chemical impurities and microbial contamination.
The applicant undertakes the water treatment process through CWS is as raw water from well, pond, bore well, etc is collected into the raw water tank and is then pumped to CWS for removing suspended solids, organic matter, chlorine, obnoxious taste, and smell.
The purified water is further sent to Reverse Osmosis membranes to remove total dissolved solids, bacteria and pathogens and then the same is sent to a purified water storage tank. It shall meet the drinking water standards and WHO guidelines.
The applicant supplied this purified water to the public at Rupees 8 for 20 litres water cans or such amounts as is reasonable. Further agreement also enables the applicant to recover capital and operational expenditure.
Relying upon the judgment of Allahabad High Court in the case of Sukhnandan v. Suraj Bali, the AAR bench comprising of Dr Ravi Prasad M.P, Additional Commissioner of Commercial Taxes and MashoodRahman Farooqui, Joint Commissioner of Central Taxes observed that the fundamental principles of construction are that words used in a statute must be understood in their ordinary grammatical sense. While applying the said principle the authority observed that the contention of the applicant is wrong. The word ‘and’ used before the ‘water sold in sealed container’ in the notification of Central Tax (Rate) is disjunctive nature and lays down that water sold in a sealed container is another type of water excluded along with the aerated water, mineral water, purified water, distilled water, medicinal water, ionic water, battery water, de-mineralized water.Subscribe Taxscan AdFree to view the Judgment