Chennai Water Board’s Activities and Exemption Scope Misinterpreted by Authorities: Madras HC Remands Rs. 96 Cr GST Demand on Pre-deposit

The Madras High Court remanded a Rs. 96 crore GST demand case against the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), citing misinterpretation of its activities and exemption scope. The court noted errors in classifying CMWSSB’s services, which include water supply via pipelines and tankers, as taxable under GST Heading 9969. It ordered reconsideration of exemption notifications and the classification of services, emphasizing the need for a fair hearing. Balancing CMWSSB's interests and revenue concerns, the court directed CMWSSB to deposit Rs. 3 crores as a precondition for the remand. Upon receipt, the respondents must provide CMWSSB with an opportunity to present its case. The writ petition was resolved accordingly by Justice Senthilkumar Ramamoorthy's bench.