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 April 12, 2025 to May 24, 2025.
In Re: Acube Engitech Company CITATION: 2025 TAXSCAN (AAR) 116
The Gujarat Authority for Advance Ruling ( AAR ) held that Goods and Services Tax ( GST ) is payable on goods supplied under a fraudulent order, even if no payment is received from the recipient.
The applicant argued that since the transaction lacked valid consent and consideration, it should not be treated as a supply under GST law. They also referred to the principles of the Indian Contract Act and a Supreme Court ruling in Devas Multimedia Pvt. Ltd. v. Antrix Corporation Ltd. to contend that a contract tainted by fraud is void and so should not trigger a tax liability.
The AAR ruled that the applicant is liable to pay GST on the goods supplied under the fraudulent order, as the transaction qualifies as a “supply” under Section 7 of the CGST Act and Section 20 of the IGST Act, read with Section 12 governing time of supply.
In Re: M/s. Gujarat Narmada Valley Fertilizers & Chemicals Limited CITATION: 2025 TAXSCAN (AAR) 117
In the case of Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC), the Gujarat Authority for Advance Ruling (AAR) held that the Input Tax Credit (ITC) on expenses incurred for buyback of shares is not admissible under GST laws, as such transactions involve securities which are neither goods nor services.
The central issue before the AAR was whether GNFC could claim ITC on various expenses incurred during the share buyback process, such as professional and legal fees. GNFC submitted that these expenses were in the course or furtherance of business, and hence, were eligible for ITC under Section 16(1) of the CGST Act, 2017.
The AAR held that since the buyback of shares is a transaction in securities, the related expenses do not relate to a supply of goods or services, and so do not satisfy the primary condition for availing ITC under Section 16(1) of the CGST Act. The AAR clarified that even if such a transaction contributes to business strategy or value creation, it cannot qualify for ITC if it is not connected to a taxable supply.
In Re: M/s. AMARDEEP UDYOG CITATION: 2025 TAXSCAN (AAR) 118
The Maharashtra Authority for Advance Ruling (AAR) ruled that the supply of a Geometry Compass constitutes a mixed supply under Section 2(74) of the CGST Act, 2017, and is taxable at 18% GST, not a composite supply. The applicant, Amardeep Udyog, a partnership firm engaged in the trading of stationery products and readymade garments, received a purchase order from BMC dated June 11, 2024, for supplying stationery items to students from Standards 4th to 10th. Among the items to be supplied was a “Geometry Compass Box”, described to include a compass, divider, scale, three set squares (30°, 45°, and 60°), a protractor, an eraser, a pencil, and a sharpener.
The bench comprising D.P. Gojamgunde and M. Priya Jadhav observed that while the product includes a metal box, it also contains multiple tools, some of which, like pencils and sharpeners, are not typically bundled with mathematical instruments. The AAR observed that consumers may expect a basic geometry box to include certain tools, but the inclusion of items like erasers and sharpeners deviates from a naturally bundled supply.
The AAR ruled that the Geometry Compass Box supplied by M/s Amardeep Udyog qualifies as a mixed supply, classifiable under HSN 90178010, and taxable at 18% GST (9% CGST + 9% SGST).
In Re: Zen Tobacco Private Limited CITATION: 2025 TAXSCAN (AAR) 120
The Gujarat Authority for Advance Ruling (AAR) ruled that “sada tambaku” pre-mixed with lime is classifiable as chewing tobacco under HSN 24039910 and is liable to Goods and Services Tax (GST) at the rate of 28%, along with applicable compensation cess.
The AAR found that the process of mixing lime with raw tobacco transforms it into a new product fit for chewing, thereby qualifying it as manufactured chewing tobacco. So, it falls outside the scope of HSN 2401 and is appropriately classifiable under HSN 24039910. The Authority ruled that the process amounts to manufacture and that the applicant’s product “sada tambaku pre-mixed with lime” is not unmanufactured tobacco. It is subject to GST at the rate of 28% and compensation cess as per Notification No. 1/2017-Compensation Cess (Rate). The AAR ruled that the applicant is not entitled to an exemption from cess and must classify the product under the appropriate manufactured tobacco heading.
In Re: SUNANDA ENVIROMENTAL INTERNATIONAL PRIVATE LIMITED CITATION: 2025 TAXSCAN (AAR) 121
In a recent ruling , the West Bengal Authority for Advance Rulings (AAR) has ruled that Contract Service related to water quality monitoring and management amounts to pure service and are exempted from tax.
A two member bench of Dr. Tanisha Dutta and Jaydip Kumar Chakrabarti found that these supply both pure service and composite are provided to The Public Health Engineering Directorate, Govt. of West Bengal, under Jal Jeevan Mission for supplying of drinking water which function is entrusted to a Panchayat under article 243G or to a municipality under article 243W of the of the Constitution of India. Further held that except the contract of services mentioned in (v) as above, all services referred to in the question can be regarded as Pure Service and as such they qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) Dated 28.06.2017, as amended.
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