Page 166 - GSTL_7th May 2020_Vol 36_Part 1

124 GST LAW TIMES [ Vol. 36
(4) Considering the nature of selling of water in Non-sealed containers
it is falling under selling of purified water with container as a single
supply as the principal activity is only selling of purified water.
4. Discussion and findings :
We have gone through the submission of the Applicant and also the
comments given by the jurisdictional CGST Commissionerate.
4.1 Now we take the queries for discussion. The first query is :
“What is the classification when the water is sold in non-sealed container
and its HSN code?”
(i) The understanding of the applicant as well as that of Jurisdic-
tional office is that the classification of the water sold in non-
sealed container and sealed container both are classified un-
der Chapter 2201.
(ii) However, the activity of applicant is to purify water using
RO and UV technology and sell the purified water in glass
(without seal or lid) and in bottles. For selling of water, the
company purchases containers including bottles and glasses.
The company will sell purified water to the Customers on
Railway station/Villages. For this purpose the company will
set up water stations at the railway platform and Water ATM
at the villages to supply purified water.
(iii) The applicant has mentioned regarding the press release dat-
ed 21-7-2016 on GST rate on goods, in which at para VII it is
mentioned that water supplied for public purposes (other
than in sealed container) does not attract GST. However, Cir-
cular No. 52/26/2018-GST, dated 9-8-2018 issued from F. No.
354/255/2018-TRU, at para 6 clarifies as below :
“6.1 Applicability of GST on supply of safe drinking water
for public purpose : Representations have been received seek-
ing clarification regarding applicability of GST on supply of
safe drinking water for public purpose.
6.2 Attention is drawn to the entry at S. No. 99 of notification
No. 2/2017-Central Tax (Rate), dated 28-6-2017, by virtue of
which water [other than aerated, mineral, purified, distilled,
medicinal, ionic, battery, de-mineralized and water sold in
sealed container] falling under HS code 2201 attracts NIL rate
of GST.
6.3 Accordingly, supply of water, other than those excluded
from Sr. 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 public purposes, if
it is not supplied in a sealed container, is exempt from GST.”
(iv) The applicant assumes that any type of water, if sold in
sealed container is not eligible for benefit under Sr. No. 99 of
Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017.
Vice versa if it is sold in non-sealed container it is eligible for
benefit under Sr. No. 99 of Notification No. 2/2017-Central
Tax (Rate), dated 28-6-2017.

GST LAW TIMES  7th May 2020  166