Classification of goods— The present appeal has been filed by the appellant against the Advance Ruling pronounced by the Maharashtra Authority for Advance Ruling.

The Appellant i.e., M/s. Nagpur Waste Water Management Pvt. Ltd, are private limited company registered under the GST Act. The Appellant has entered into a contract on 12.12.2014 with Nagpur Municipal Corporation (NMC) with regard to setting up, and operating of Sewage Treatment Plant for the treatment of sewage water generated in Nagpur city.

In addition to this, the Appellant is also entitled to sell the Tertiary Treated Water to any person for non-potable application.

In advance Ruling order, it will not be eligible for exemption from GST in terms of the provisions of the entry at SI. No. 99 of the Exemption Notification No. 02/2017-Central Tax (Rate) dated 28 June 2017; and that the same will be taxable at the rate of 18% in terms of the entry at the SI. No. 24 of the Schedule III to the Notification No. 1/2017-C.T. (Rate) dated 28.06.2017.

The Appellant has contended that it has never been the intention of the Government, i.e., either Central Government or State Government, to levy any indirect tax on water of general purposes. In this regard, they have stated that even under the erstwhile indirect tax regime, no tax, whether in the nature of Central Excise or in the nature of VAT, was leviable on the water of general purposes, hence the supply of TTW was not subject to any indirect tax under the erstwhile tax regimes. Basis this contention, they have argued that the said impugned product, i.e., TTW, will also not be liable to tax even under the GST regime. They have further contended that since the impugned product was not subject to any indirect tax under the erstwhile tax regime, the same should also not be liable to tax under GST regime.

In this regard, this authority 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 2018, 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, i.e., TTW, which can aptly be construed as water of general purpose as discussed earlier, is eligible for exemption under the relevant entry at SI. No. 99 of the exemption notification no. 02/2017-C.T. (Rate) dated 28.06.2017.

Held that— This authority set aside the Advance Ruling Order and hold that Tertiary Treated Water (TTW) will be eligible for exemption in terms of entry at SI.No. 99 of the Exemption Notification No. 02/2017-C.T. (Rate) dated 28.06.2017. Thus, the Appeal filed by the Appellant is, hereby, allowed.