Taxability of Tertiary Treated Water

Taxability of Tertiary Treated Water

Taxability of Tertiary Treated Water

THE MAHARASHTRA AUTHORITY FOR ADVANCE RULING vides NO.GST-ARA-65/2020-21/21-22/B-3 Dated 27.07.2021 on an application field by M/s NAGPUR WASTEWATER MANAGEMENT PVT LTD passed its advance ruling after considering the issues involved, on which advance rulings are sought by the applicant, relevant facts, and interpretation of the law.


The Nagpur Municipal Corporation (NMC) in order to manage the sewage system of Nagpur city and to treat the sewage water generated in Nagpur City, has appointed the applicant, under a PPP contract basis, for treatment of sewage water. The applicant is therefore awarded a contract to set up and operate the Sewage Treatment Plant (STP) located at Bhandewadi, Nagpur on Built Operate and Transfer basis (BOT basis). In addition, the applicant has the right to sell Treated Effluent/ Tertiary Treated Water (TTW) which is generated from the Sewage Treatment Plant (STP) to any person for non-potable application. The applicant supplies such TTW to the Maharashtra State Electricity Generating Co. Ltd. (hereinafter referred to as MAHAGENCO), Maharashtra.


  1. Whether the "Tertiary Treated Water" supplied by the applicant to Maharashtra State Electricity Generating Co. Ltd. (MAHAGENCO) is taxable under the GST law?
  2. If yes, what will be the rate of GST?


Notification No. 1/2017-C.T. (Rate), dt.28-06-2017 prescribe rate of tax. In Schedule III of the said notification at Serial No. 24, it covers water. The water as described here covers waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavored. The same is taxable @ 9% CGST/9% SGST (18% IGST).

The above notification was subject to amendment vide Notification No. 06/2018-C.T (Rate), dt.25-01-2018. Also, a new entry relating to water was inserted vide the same Notification at Sr. No. 46B of Schedule II of the Notification. Effected from 29.02.2018. This new notification cover only drinking water packed in 20 liters bottles which will be taxed @ 6% CGST/6% SGST (12% IGST).

Notification No. 02/2017-C.T.-(Rate), dt.28-06-2017 was issued to notify the exemptions on supply of goods under CGST Act. The entry relating to water was notified at Serial No. 99 of the Notification. This entry covers Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized, and water sold in sealed container).

The water supplied by the applicant is water obtained after the treatment to sewage water. In no case, TTW supplied by the applicant can be called aerated, mineral, distilled, medicinal, ionic, battery, demineralized water. It is also neither sold in a sealed container nor in 20 liters package. If the TTW is not considered as purified water then it would be covered by notification No. 2/2017 C.T.-(Rate) under Entry 99 and therefore, would be exempt from tax. However, if the "TTW" is considered as purified water and held as taxable then the same would be taxable under Entry 24 Notification No. 1/2017.

It is observed that the applicant has processed the sewage water which contains various kinds of impurities. The sewage water cannot be used in its original form. Sewage water can be used only after it is purified and even the purified sewage water is not used for drinking, as submitted by the applicant. It is however found to have industrial uses. Therefore in our view, Tertiary Treated Water is purified sewage water and since it is purified water, the same will not fall under Sr. No. 99 of Notification 02/2017. As stated by the applicant the said water is not potable hence Entry No. 46 B which pertains to drinking water only, is also not applicable to the impugned product.

Thus we are of the firm opinion that, the TTW supplied by the applicant is "purified Water" and is covered Entry No. 24 of Notification No. 01/2017-C.T. (Rate) dated 28.6.2017. Hence it is taxable @ 18% (9% SGST & 9% CGST) / IGST under Entry 24 of Schedule-III of Notification No. 1/2017 Central Tax (Rate) dtd.28.06.2017 as amended by Notification No. 06/2018 and Central Tax (Rate) dtd.25.01.2018.


  1. The "Tertiary Treated Water" supplied by the applicant to Maharashtra State Electricity Generating Co. Ltd. (MAHAGENCO) is taxable under the GST law.
  2. As per the above discussion made, the Tertiary Treated water is liable tax @ 18% (9% CGST and 9% SGST)/IGST.


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