‘Purified drinking water supply via tankers taxable’

Composite supply, attracts 18%: AAR

Supply of drinking water to the public through mobile tankers or dispensers by a charitable organisation is taxable at 18% under the GST, AAR has ruled. The Andhra Pradesh bench of the Authority for Advance Ruling (AAR) has ruled — in the case of Vijayavahini Charitable Foundation — that since the organisation is supplying purified water, hence it is not fit for GST exemption. The Foundation had sought an advance ruling on whether the supply of groundwater after undertaking purification through reverse osmosis to the general public either through the dispensing unit, or mobile tanker, at a concessional rate is exempt from Goods and Services Tax (GST). The AAR said the principal supply undertaken by the organisation is a supply of purified water, which is taxable at 18%, while the service of distribution through mobile units is an ancillary service and taxable at 18%. “It is invariably a composite supply and the rate of tax of purified water prevails, being the principal supply,” the AAR noted.