HC quashes Rs. 96cr GST demand notice to Metrowater
Chennai: In a reprieve to the Chennai Metrowater Supply and Sewerage Board (CMWSSB), Madras high court has set aside an order of the additional commissioner of CGST demanding Rs. 96 crore as tax.
Holding that the order did not distinguish between potable and purified water as well as different services provided by CMWSSB, Justice Senthilkumar Ramamoorthy, however, directed CMWSSB to remit a sum of Rs. 3 crore within six weeks.
He also instructed CGST to issue a fresh order after giving CMWSSB a personal hearing within three months from the date of reception of Rs. 3 crore.
The additional commissioner, CGST and Central Excise issued a notice to CMWSSB levying 18% GST for its services along with penalty to the tune of Rs. 96.1 crore, prompting the CMWSSB to approach the high court challenging the order. Counsel for CMWSSB cited various notifications on how water for drinking purposes is exempt from GST and that services in relation to functions entrusted to a panchayat under Article 243G of the Constitution are to be treated as neither supply of goods nor supply of services as recommended by the GST Council.
