Madras HC quashed GST Demand Notice of Rs.96 Crore to Chennai Metrowater:

Madras HC quashed GST Demand Notice of Rs.96 Crore to Chennai Metrowater The Chennai Metrowater Supply and Sewerage Board (CMWSSB) has received relief after the Madras High Court overturned the additional commissioner of CGST's decision to collect Rs.96 crore in tax. Justice Senthilkumar Ramamoorthy ordered CMWSSB to remit Rs.3 crore within six weeks, despite the order not distinguishing between potable and filtered water or CMWSSB's various services. He further directed CGST to issue a new order after conducting a personal hearing with the CMWSSB within three months of receiving the Rs.3 crore. The additional commissioner of CGST and Central Excise issued a notice to CMWSSB levying 18% GST on its services and imposing a penalty of Rs.96.1 crore, causing the CMWSSB to file an appeal in the high court. Counsel for the CMWSSB cited various notifications stating that water for drinking purposes is exempt from GST and that services related to functions entrusted to a panchayat under Article 243G of the Constitution should be treated as neither a supply of goods nor a supply of services, as recommended by the GST Council. Senior standing counsel Ramesh Kutty, appearing for the GST commissionerate, stated that the CMWSSB not only provides water supply and sewerage facilities to the general public via pipelines but also supplies water, including purified water, in tankers at commercial and dynamic rates to commercial establishments and large industrial units. According to Justice Senthilkumar, the GST Commissionerate failed to discriminate between potable water, which is exempt from GST, and purified water, which is chargeable.