Maintenance of Flow Meters for Recycled Water Supply Attracts 18% GST: AAR

The applicant, M/s Greater Visakhapatnam Smart City Corporation Limited (GVSCCL), is a special purpose vehicle (SPV) established as a Public Limited Company. It is owned by the state government of Andhra Pradesh and the Greater Visakhapatnam Municipal Corporation (GVMC) on a 50:50 paid-up capital. It operates under the guidelines issued by the Government of India and the state government. It is engaged in the implementation of the Smart City Mission for Visakhapatnam.

The applicant has entered into a renewed tripartite agreement with Greater Visakhapatnam Municipal Corporation (GVMC) and M/s Hindustan Petrol Corporation Limited (HPCL) to supply recycled water to M/s HPCL, where GVMC and GVSSL provided a sewerage infrastructure project in Visakhapatnam.

The applicant filed an application before the Andhra Pradesh Authority for Advance Ruling (AAR) to get an Advance Ruling on the following questions:

“1. Whether the maintenance charges of flow meters installed at the end user premises to record the recycled water fall under the composite supply.

2. If yes, the rate applicable to principal supply, i.e., nil rate, can be applied to Ancillary supply also, i.e., maintenance charges of flow meters also.

3. If not? What is the applicable GST rate, and what is the SAC/HSN code applicable to the same?”

As per the Andhra Pradesh AAR:

• The maintenance charges for flow meters do not qualify as a composite supply.
• The applicable GST rate is 18% (9% APGST + 9% CGST), and the SAC code is 9987.