AAR and AAAR Weekly Round Up

This round-up analytically summarises the key stories related to the Goods and Services Tax Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR) reported at Taxscan.in during the period from January 18, 2025 to February 22, 2025.

Beef Fry, Beef Roast and other Pre-Packaged “Ready to Eat” Food attracts 18% GST: AAR

M/S. HIC-ABE SPECIAL FOODS PRIVATE LIMITED CITATION: 2025 TAXSCAN (AAR) 102

Kerala’s deep-rooted passion for food—exemplified by the iconic Porotta and Beef Fry combo often takes center stage in discussions about its rich culinary heritage. However, a recent ruling by the Kerala Goods and Services Tax ( GST ) Authority for Advance Rulings ( AAR ) takes the taste buds by storm.

The company argued that its offerings, made without added preservatives and packed using Japan’s RETORT technology to ensure sterility and a long shelf life, should be classified differently. But the AAR concluded that since no further cooking is required (only optional heating), these food items fall under the bracket of ready-to-eat packaged foods, taxable at 18 percent. The Authority also examined dishes such as Kerala Chicken Curry, Chicken Biryani, Mutton Curry, Beef Fry, and others, categorizing them as “ready to eat packaged food” rather than “prepared or preserved meat.” Meanwhile, items like Soya Coconut Fry, Masala Rice, Coconut Rice, Vegetable Pulao, and Tomato Rice were placed under “food preparations not elsewhere specified or included.”

AAR Rules in Favor of Hindustan Zinc: ITC not applicable to Goods or Services received for Increasing Tailing Dam Height

In Re: M/s HINDUSTAN ZINC LIMITED CITATION: 2025 TAXSCAN (AAR) 103

In a ruling in case of Hindustan Zinc, the Rajasthan Authority of Advance Ruling ( AAR ) has held that Input Tax Credit ( ITC ) not applicable on on goods/services received for increasing tailing-dam height. The two-member bench of Mahipal Singh and Mahesh Kumar Gowla decided that, in accordance with Section 17(5)(c) and 17(5)(d) of the Central Goods and Service Tax Act, 2017, input tax credit is not available for goods and services received for raising the height of a tailing dam used to dispose of and treat hazardous waste from mining operations.

In accordance with Sections 17(5)(c) and 17(5)(d) of the Central Goods and Service Tax Act of 2017, the applicant requested an advance ruling on whether input tax credit is available for goods and services received for raising the height of a tailing dam used to dispose of and treat hazardous waste from mining operations, known as tailings. According to the applicable laws, namely the Mines and Minerals (Development and Regulation) Act, 1957 read with the Mineral Conservation and Development Rules, 2017, the AAR determined that the tailing dam is built for the safe disposal, treatment, and management of hazardous waste from mining operations.

Thyssenkrupp’s EPC Agreement is a Composite Supply and not Divisible Contract under GST: AAR

In Re: M/s Thyssenkrupp Industrial Solutions (India) Private Limited, CITATION: 2025 TAXSCAN (AAR) 104

In a recent ruling, the Gujarat Authority for Advance Ruling ( AAR ) held that an Engineering, Procurement, and Construction ( EPC ) contract entered into by Thyssenkrupp Industrial Solutions (India) Private Limited (Thyssenkrupp) with the Indian Oil Corporation Limited ( IOCL ) constitutes a composite supply under the Goods and Services Tax ( GST ) regime and cannot be treated as a divisible contract.

The two-member Bench of the Gujarat Authority for Advance Ruling constituted by SGST Member Kamal Shukla and CGST Member P.B. Meena observed that the EPC Contract cannot be split into separate supplies for goods and services since EPC contracts qualify as a works contract under Section 2(119) of the CGST Act, 2017 and are inherently turnkey in nature, requiring the contractor to deliver a fully functional project. The Bench further clarified that the subject-matter contract is not a divisible contract but a single and composite contract, with the component of imported goods forming part of the transaction value for computation of value of worlds contract service.

GST Applicable on Imported Goods Sold under HSS and later used in EPC Contract, Even If IGST Paid at Import: AAR

In Re: M/s Thyssenkrupp Industrial Solutions (India) Private Limited, CITATION: 2025 TAXSCAN (AAR) 104

A recent ruling delivered by the Gujarat Authority for Advance Ruling ( AAR ) clarified that imported goods sold under a High Seas Sale ( HSS ) agreement and later used in a project initiated through a Engineering, Procurement, and Construction ( EPC ) contract shall attract Goods and Services Tax ( GST ), even if Integrated Goods and Services Tax ( IGST ) was already paid at the time of import of the goods.

The two-member Bench of the Gujarat Authority for Advance Ruling constituted by SGST Member Kamal Shukla and CGST Member P.B. Meena rejected the Applicant’s submissions ruling that the EPC contract is an indivisible works contract, which is taxed as a composite supply of services under GST law. The Bench further clarified that even if the imported goods were initially sold under HSS and taxed separately at customs, they go on to become part of the overall EPC contract once incorporated into the project. Therefore, the works contract shall include the entire value of the project including that of the imported goods for the purposes of calculating GST.

Leasing of E-Bikes without Operator Classifiable under Amended Tax Rate Notification at 18% GST: AAAR

In Re: M/s. True Solar Private Limited CITATION: 2025 TAXSCAN (AAAR) 110

In a recent case, the Odisha State Appellate Authority for Advance Ruling ( AAAR ) for Goods and Service Tax. upheld that the leasing of E-Bikes without an operator is classifiable under the heading 9971, i.e. financial and related services under entre SL No.15 (ii) of  Notification No 20/2019- CT(R) dated, 30th September 2019 and at a GST of 18%.

The AAAR observed that it is important to examine the nature of the lease agreement, whether it constituted a financial lease or an operating lease agreement. From all the submissions, it was observed that the applicant had entered into a financial lease agreement with the lessee and engaged in the supply of financial leasing services/ financial and related services. It was observed that the appropriate heading for this would be 9971.

The two-member bench consisting of Yamini Sarangi ( Member (State Tax) ) and M Sreedhar Reddy ( Member(Central Tax) ) further asserted that the leasing of electric vehicles (E-Bikes) without operator is classifiable under the heading 9971, that is, financial and services under entre SL No. 15 (ii) of Notification No. 20/2019 dated. 30th September 2019, and the tax rate will be the same as applicable on the supply of goods involving the transfer of title in goods.

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