Case Details: Palsana Enviro Protection Ltd., In re - [2025] 174 taxmann.com 5 (AAAR-GUJARAT)
Judiciary and Counsel Details
- Rajeev Topno & B.V. Siva Naga Kumari, Member
-
Mihir Gandhi, for the Petitioner.
Facts of the Case
The appellant, a Common Effluent Treatment Plant (CETP), recycles effluent from various industries and supplies treated water to its member units for industrial use. The appellant sought clarification from the Gujarat Authority for Advance Ruling (GAAR) regarding the classification of the treated water and its eligibility for exemption under Sl. No. 99 of Notification No. 2/2017-Central Tax (Rate), dated 28-06-2017, as amended by Notification No. 7/2022-Central Tax (Rate), dated 13-07-2022. The exemption is granted to purified water intended for consumption by the public.
The appellant argued that the treated water, although used for industrial processes, was purified and free from toxic materials, and therefore, should qualify for the exemption. The appellant submitted a laboratory certificate to support the claim that the treated water was purified. However, the GAAR determined that the treated water from the CETP, while free from toxic materials, still contained trace amounts of dissolved minerals and chemicals, classifying it as ‘de-mineralised water’ and therefore not eligible for the exemption under the notification. Aggrieved with the Gujarat AAR’s findings, the appellant then approached the Gujarat Authority for Advance Ruling (AAAR) for a further review.
AAAR Held
The Hon’ble Gujarat AAAR upheld the Gujarat AAR’s finding that the treated water from the Common Effluent Treatment Plant (CETP) is de-mineralised water and ineligible for exemption under the said notifications. The appellant’s laboratory certificate, submitted at the appellate stage, was not accepted due to its lack of accreditation and details on the sampling method. Referring to a similar Tamil Nadu AAR ruling, the AAAR confirmed the treated water’s taxability.
List of Cases Reviewed
- Palsana Enviro Protection Ltd., In re [2023] 148 taxmann.com 255 (AAR – GUJARAT) (para 16) affirmed
- Mannarai Common Effluent Treatment (P.) Ltd., In re [2023] 155 taxmann.com 110/100 GST 671/79 GSTL 127 (AAR – TAMILNADU) (para 4) followed
The post Demineralised Water GST Exemption Denied – AAAR Gujarat appeared first on Taxmann Blog.