Drinking water supply through mobile tankers taxable at 18%
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Drinking water supply through mobile tankers taxable at 18%
1. Supply of drinking water to the public through mobile tankers or dispensers by a charitable organization is taxable at 18 percent under the GST, AAR has ruled.
2. The Andhra Pradesh bench of the Authority for Advance Ruling (AAR) has ruled -- in the case of Vijayavahini Charitable Foundation -- that since the organization is supplying purified water, hence it is not fit for GST exemption.
3. Vijayavahini Charitable 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).
4. The AAR said the principal supply undertaken by the organization is a supply of purified water, which is taxable at 18 percent, while the service of distribution through mobile units is an ancillary service and taxable at 18 percent.
5. "It is invariably a composite supply and the rate of tax of purified water prevails, being the principal supply... The said supply is not covered under the exemption and taxable at 18 percent...," it noted.
6. According to the AAR, the main supply provided by the organization is the supply of purified water and is taxable at 18%, while the water distribution service via mobile units is an ancillary service and is taxable at 18%.
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