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

The Appellant have a Sewage Treatment Plant (‘STP’) at its Trombay premises. This plant uses sewage water and converts it into water for use in the factory for manufacture of the fertilizers.

The advance ruling authority has been held that “Treated Water” obtained from STP 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- Integrated 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. 01/2017-Integrated Tax (Rate) dated 28th June 2017.

The moot issue before us is whether the impugned product, i.e., STP treated water supplied by the Appellant to M/s. BPCL, can be construed as ‘purified water’, or not.

In this regard, we intend to 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, which can aptly be construed as water of general purpose as discussed earlier, is eligible for exemption under the relevant entry at Sl. 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 passed by the Maharashtra Advance Ruling Authority, and hold that STP treated water 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.