Page 128 - GSTL_23rd April 2020_Vol 35_Part 4

454 GST LAW TIMES [ Vol. 35
2/2017 of Central Tax (Rate), dated 28th June, 2017, by virtue of which the sup-
ply of water falling under HSN Code 2201 attracts nil rate GST. The relevant ex-
tract of the said entry reproduced as under :
“Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery,
de-mineralized and water sold in sealed, container] is exempt from GST”.
13. This entry has been clarified by the C.B.E. & C. vide Circular No.
52/26/2018, dated 9th August, 2018 wherein, it is clarified as under :
“In this circular, attention is drawn to the entry at Sl. No. 99 of Notification
No. 2/2017-Central Tax (Rate), dated 28 June, 2017, by virtue of which wa-
ter [other than aerated, mineral, purified, distilled, medicinal, ionic, battery,
demineralized and water sold in sealed container] falling under HSN code
2201 attracts NIL rate of GST.
Accordingly, supply of water, other than those excluded from Sl. No. 99 of
Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017, would attract
GST at “NIL” rate. Therefore, it is clarified that supply of drinking water for pub-
lic purposes, if it is not supplied in a sealed container, is exempt from GST.”
14. On perusal of the aforesaid Circular No. 52/26/2018, dated 9th Au-
gust, 2018, and Entry No. 99 of Notification No. 2/2017-Central Tax (Rate), dated
28-6-2017 and the nature of the activity carried out by the applicant, it was ob-
served that applicant supplying purified drinking water to the general public at
reasonable price after removing all the physical, chemical and biological impuri-
ties in unsealed containers which are brought by the public themselves. In the
above said circular it is clearly mentioned that other than those excluded from
the Sl. No. 99 of Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017,
would attract GST at “NIL” rate. The following type of waters are excluded from
the said notification and exigible to GST which are :
(i) Aerated water
(ii) Mineral water
(iii) Purified water
(iv) Distilled water
(v) Medicinal water
(vi) Ionic water
(vii) Battery water
(viii) de-mineralized water; and
(ix) Water sold in sealed container.
15. In the instant case, applicant supplying purified drinking water to
urban under served people across various metro cities by installing the commu-
nity water system. In the process applicant removes suspended solids, organic
matter, chlorine, obnoxious taste and smell from raw water and then sent to Re-
verse Osmosis membranes to remove total dissolved solids, bacteria and patho-
gens. During this process raw water converted into purified drinking water and
this purified drinking water is supplied to the public.
16. The contention of the applicant with reference to Sl. No. 99 of the
Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017 is that the term ‘Wa-
ter sold in sealed container’ runs along with the remaining terms of the notifica-
tion. Further, the term ‘and’ prior to the term Water’ should be read in a manner
that is conjunctive and in such a way that the phrase ‘in a sealed container’ is
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