Tertiary Treated water is purified water taxable @18%

Last updated: 03 August 2021

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An advance ruling has determined that Tertiary Treated Water (TTW), which is purified sewage water supplied for industrial use, is subject to an 18% GST. The Maharashtra Authority for Advance Ruling found that TTW does not qualify for exemption as it is purified water and not specifically listed under the exempted categories. It is classified under 'Waters' for industrial use, making it taxable.

Court :
Maharashtra AAR

Brief :
In M/s. Nagpur Waste Water Management Pvt. Ltd. [GST-ARA-65/2020-21/21-22/B-35 dated July 27, 2021], M/s Nagpur Waste Water Management Pvt. Ltd. ('the Applicant') seeked an advance ruling on taxability of 'Tertiary Treated Water' ('TTW') supplied by the Applicant to Maharashtra State Electricity Generating Co. Ltd. ('MAHAGENCO').

Citation :
[GST-ARA-65/2020-21/21-22/B-35 dated July 27, 2021]

In M/s. Nagpur Waste Water Management Pvt. Ltd. [GST-ARA-65/2020-21/21-22/B-35 dated July 27, 2021], M/s Nagpur Waste Water Management Pvt. Ltd. ('the Applicant') seeked an advance ruling on taxability of 'Tertiary Treated Water' ('TTW') supplied by the Applicant to Maharashtra State Electricity Generating Co. Ltd. ('MAHAGENCO').

The Hon'ble Maharashtra Authority for Advance Ruling observed that, the Applicant has processed the sewage water which contains various kinds of organic and inorganic impurities. Noted that the sewage water cannot be used, in any way, in its original form, it can only be used after it is purified and is not used for drinking.

Held that TTW is purified sewage water and since its purified water and will not fall under Sr. No. 99 of the Notification No. 02/2017-Central Tax (Rate) dated June 28, 2017 ('Goods Exemption Notification') i.e., 'Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container]'. Therefore, TTW will not be exempted.

Further held that, TTW which is sold to MAHAGENCO for its industrial use falls under Sr. No. 24 of Schedule-III of the Notification No. 01/2017-Central Tax (Rate) dated June 28, 2017 ('Goods Rate Notification') as amended by Notification No. 06/2018- Central Tax (Rate) dated January 25, 2018 i.e., 'Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured other than Drinking water packed in 20 litres bottles' and thus, would be taxable @18% (9% CGST and 9% SGST).

FAQ :

Tertiary Treated Water (TTW) is sewage water that has undergone a purification process to remove various organic and inorganic impurities, making it usable for industrial purposes but not for drinking.

No, TTW is not exempt from GST. The Authority for Advance Ruling held that it does not fall under the specified exemptions for water.

Tertiary Treated Water supplied for industrial use is taxable at a rate of 18% GST (9% CGST and 9% SGST).

TTW falls under the category of 'Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured other than Drinking water packed in 20 litres bottles' for industrial use.