Industrial water filters

F.No. 354/159/2002-TRU
Government of India
Ministry of Finance & Company Affairs
Department of Revenue
Tax Research Unit

Subject: Exemption from Customs and Central Excise Duty to Water Treatment Plants

            Notification 91/2002-Cus, 92/2002-Cus, 93/2002-Cus and 47/2002-CE, all dated 6^th September, 2002 have been issued to extend exemption from Customs and Central Excise duties in respect of water treatment projects for supply of drinking water for human and animal consumption.

2.            On the Customs side, such projects have been notified for the benefit of assessment as project import under heading 98.01 of the First Schedule to the Customs Tariff Act, 1975. The duty applicable to such projects has been fully exempted. They would attract ‘nil’ basic duty and ‘nil’ additional duty. Consequently, they would be exempt from Special Additional Duty as well. As these projects would be assessed under heading 98.01, the benefit would be available to all items of machinery, including instruments, apparatus and appliances, auxiliary equipment and their components/ parts require for the initial setting up of the project as well as for substantial expansion of any such project. The concession would be available regardless of whether the full plant is imported or only some machinery/equipment is imported (including when it is imported in CKD/ SKD or only in components). However, as specified in notification 91/2002-Cus and 93/2002-Cus, both dated 6.9.2002, the benefit would be available only to water treatment plants intended to supply potable drinking water for human or animal consumption. The benefit would not be admissible to water treatment plants supplying water for industrial purposes. It is also clarified that "water treatment plant" would include plants for desalination, demineralization, purification of water or for any similar process intended to make the water fit for consumption of humans or animals. For the purpose of registration of the project under heading 98.01, the project authority would require a certificate from the Collector / District Magistrate / Deputy Commissioner of the district in which the project is to be set up.

3.            On the Central Excise side, full exemption from duty has been extended to all items of machinery, including instruments, apparatus and appliances, auxiliary equipment and their components/ parts required for the setting up of water treatment plants intended to treat water to make it fit for consumption of humans or animals. It is also clarified that "water treatment plant" would include plants for desalination, demineralization, purification of water or for any similar process intended to make the water fit for consumption of humans or animals. Central Excise duty will also be exempt on pipes required for obtaining untreated (raw) water from its source to the plant, and for supplying the treated (potable drinking) water to the storage place from which it would be further supplied for consumption of humans or animals. The duty concession would not be available for pipes required to supply the treated water from its storage place to the place of consumption. The concessions would be subject to the certification by the Collector / District Magistrate / Deputy Commissioner of the district in which the water treatment plant is to be set up.

4.            Incidentally, notification 91/2002-Cus also extends benefit of assessment under heading 98.01 to the LNG project of M/s Hazira LNG private Limited at Hazira and to certain pipeline projects of M/s IOC. However, these would be assessed to the normal rate of duty applicable to projects, that is 25% basic plus 16% Additional Duty plus 4% Special Additional Duty.

5.            Field formations may be suitably informed.

Sir,

If you refer General Exemption No.49 vide Sr.No.8D (Not No.6/2008 CE Dt.01.03.2008) can we get the concession from Excise Duty @6% for Water Filteration or purification equipments in our case? where as our machine supplies to Pharma Industry.

Pls advice

Sir,

If you refer General Exemption No.49 vide Sr.No.8D (Not No.6/2008 CE Dt.01.03.2008) can we get the concession from Excise Duty @6% for Water Filteration or purification equipments in our case? where as our machine supplies to Pharma Industry.

Pls advice