VAT Applicability
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 February 2010
Hello,
In one of my client they are into sales and service of marine boats. They are providing dringking water to boats. Please confirm whether VAT is applicable for this sales of water.
They are selling around Rs. 12 lakhs p.a.
Regards,
CA Hemal Parikh
In one of my client they are into sales and service of marine boats. They are providing dringking water to boats. Please confirm whether VAT is applicable for this sales of water.
They are selling around Rs. 12 lakhs p.a.
Regards,
CA Hemal Parikh
CA Vijay Kumar Gupta
(Expert)
03 February 2010
Please clarify in which your client is registered and whether thedrinking water is packed one, whether mineral water or simple water. you may call me on 9868826026 for the details. Pl. also clarify whether your client is selling water or marine boats. Place of delievery of water is also important.
02 August 2025
For the sale of drinking water to marine boats, here’s a general perspective on VAT applicability:
* **VAT applicability on water** depends on whether it is considered a **taxable good** or an **exempted item** under the state VAT law.
* In many states, **drinking water (packaged or bottled)** is either **exempt from VAT** or taxed at a **lower rate** (often exempt or 5%).
* However, **sale of bulk water (non-packaged)** may or may not be taxable depending on the purpose and state rules.
* Since your client supplies **drinking water to boats (probably in bulk)**, VAT applicability may depend on whether this supply is considered a **sale of goods** or a **service**.
* If it is considered a **sale of goods**, VAT will be applicable as per the relevant rate in the state.
* If it is a **service (like supply along with service on boats)**, then service tax (now GST) may be applicable instead of VAT.
**Specific to your query:**
* Since the turnover is Rs. 12 lakhs per annum, it is above the typical VAT registration threshold in many states.
* Unless the state exempts the supply of drinking water, VAT should be charged on this supply.
---
**Recommendation:**
* Check the specific **state VAT schedule** (whichever state the sale is happening in) for the status of drinking water.
* Also confirm if the sale is categorized as a supply of goods or a service.
* You may want to consult the local VAT department or a tax advisor for specific rulings related to marine supplies.
* **VAT applicability on water** depends on whether it is considered a **taxable good** or an **exempted item** under the state VAT law.
* In many states, **drinking water (packaged or bottled)** is either **exempt from VAT** or taxed at a **lower rate** (often exempt or 5%).
* However, **sale of bulk water (non-packaged)** may or may not be taxable depending on the purpose and state rules.
* Since your client supplies **drinking water to boats (probably in bulk)**, VAT applicability may depend on whether this supply is considered a **sale of goods** or a **service**.
* If it is considered a **sale of goods**, VAT will be applicable as per the relevant rate in the state.
* If it is a **service (like supply along with service on boats)**, then service tax (now GST) may be applicable instead of VAT.
**Specific to your query:**
* Since the turnover is Rs. 12 lakhs per annum, it is above the typical VAT registration threshold in many states.
* Unless the state exempts the supply of drinking water, VAT should be charged on this supply.
---
**Recommendation:**
* Check the specific **state VAT schedule** (whichever state the sale is happening in) for the status of drinking water.
* Also confirm if the sale is categorized as a supply of goods or a service.
* You may want to consult the local VAT department or a tax advisor for specific rulings related to marine supplies.
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