Case Details: In re : Greater Visakhapatnam Smart City Corporation Ltd. (2025) 36 Centax 419 (A.A.R.-GST-A.P.)
Judiciary and Counsel Details
- K. Ravi Sankar & B. Lakshmi Narayana, Member
- M. Ravi Teja, CA for the Applicant.
Facts of the Case
The applicant, a special purpose vehicle of the State Government and the municipal corporation, implemented a sewerage and recycled water project and supplied recycled water to HPCL under a tripartite agreement with GVMC and HPCL. The agreement provided that recycled water supplied to HPCL would be measured through flow meters installed at HPCL’s premises. The agreement further specified that separate charges at the rate of 0.75% of the monthly bill value would be levied upon HPCL towards maintenance of meters, instrumentation, and automation, subject to revision. The applicant sought a ruling on whether such maintenance charges formed part of a composite supply with the supply of recycled water. The matter was accordingly placed before the Authority for Advance Ruling (AAR).
AAR Held
The AAR held that the agreement explicitly separated consideration for supply of ‘product and clear water’ from charges for maintenance of flow meters, and that the latter were independently billed and not subsumed within the consideration for water supply. The authority held that this contractual separation demonstrated that maintenance of flow meters constituted an independent service and did not satisfy the requirements of a composite supply under Section 2(30) of the CGST Act/Andhra Pradesh GST Act. It was therefore held that the maintenance charges of flow meters installed at the end user premises for recording recycled water did not fall under composite supply.
