AAR and AAAR Weekly Round Up
Read on to know the recent AAR and AAAR matters covered at taxscan.in
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 May 24, 2025 to June 28, 2025.
No GST on Rotary Club Membership and Admission Fees: AAAR
In Re: RotaryClub of Mumbai Queens Necklace CITATION : 2025 TAXSCAN (AAAR) 116
The Maharashtra Appellate Authority for Advance Ruling (AAAR) ruled that no Goods and Services Tax (GST) is payable on membership subscription and admission fees collected by Rotary Club of Mumbai Queens Necklace, as such collections are not considered a “supply of services” under the CGST Act, 2017.
The bench comprising Sungita Sharma and Shri Rajiv Jalota observed that the amounts collected were entirely used for internal administrative purposes, without conferring any individual benefits or services upon members. They observed that the club’s objectives, such as promoting peace, education, and sanitation, were social in nature and not in furtherance of business.
18% GST on Construction of EHV Substations/Lines for Dedicated User of MSETCL through Contractor: AAR
In Re: M/s.Maharashtra State Electricity Transmission Company Limited CITATION : 2025 TAXSCAN (AAR) 122
The Maharashtra Authority for Advance Ruling (AAR) recently held that the construction of Extra High Voltage (EHV) substations and transmission lines conducted by Maharashtra State Electricity Transmission Company Limited (MSETCL) through contractors for specific users constitutes a taxable supply and attracts 18% Goods and Services Tax (GST).
The Bench of D.P. Gojamgunde, Joint Commissioner of State Tax, and Priya Jadhav, Joint Commissioner of Central Tax observed that the nature of the work is not incidental to the transmission of electricity, but rather the execution of civil and electrical works for dedicated usage. The Authority further stated that such services are not supplied to electricity consumers at large but to project-specific entities for infrastructural expansion and shall attract 18% GST.
18% GST on Construction of New Transmission Bay/Express Feeder of Maharashtra Electricity Co.: AAR
In Re: M/s.Maharashtra State Electricity Transmission Company Limited CITATION : 2025 TAXSCAN (AAR) 122
The Maharashtra Authority for Advance Ruling (AAR) recently held that the construction of a new transmission bay or express feeder by Maharashtra State Electricity Transmission Company Limited (MSETCL), when undertaken through a contractor and funded by a third-party end-user would attract Goods and Services Tax (GST) at the rate of 18%.
The AAR Bench, comprising Shri D.P. Gojamgunde, Joint Commissioner of State Tax, and Ms. Priya Jadhav, Joint Commissioner of Central Tax, observed that the exemption under Entry 25 is confined to the supply of electricity transmission services to distribution licensees or consumers of electricity.
In the present case, the construction of a dedicated bay or feeder for a specific user would not constitute such supply and was instead, deemed as a contractual agreement to perform construction work for a consideration paid by the beneficiary.
Shifting/Raising Height of Transmission Towers/Lines through Contractor attracts 18% GST: AAR
In Re: M/s.Maharashtra State Electricity Transmission Company Limited CITATION : 2025 TAXSCAN (AAR) 122
The Maharashtra Authority for Advance Ruling (AAR) recently held that the activity of shifting or raising the height of transmission towers or lines carried out through a contractor, for a dedicated consumer like the National Highways Authority of India or Indian Railways amounts to a taxable supply under Goods and Services Tax (GST) regime and attracts tax at the rate of 18%.
The Bench of D.P. Gojamgunde, Joint Commissioner of State Tax, and Priya Jadhav, Joint Commissioner of Central Tax observed that the activity in question is not covered under the exemption for transmission and distribution of electricity under Entry 25 or the ancillary services under Entry 25A of Notification No. 12/2017.
The authority further noted that the service is not rendered to consumers of electricity and does not involve any activity of power transmission per se. Rather, it amounts to a contractual service provided to entities seeking relocation of transmission assets for their project needs.
18% GST on MSETCL’s Allocation of Spare Existing Asset to Dedicated Consumers for Specified Duration on Payment: AAR
In Re: M/s.Maharashtra State Electricity Transmission Company Limited CITATION : 2025 TAXSCAN (AAR) 122
The Maharashtra Authority for Advance Ruling (AAR) recently ruled that the Maharashtra State Electricity Transmission Company Limited (MSETCL) is liable to pay 18% Goods and Services Tax (GST) on consideration received by them for the temporary allocation of an existing transmission bay (a spare asset) to dedicated consumers during the period of when a new bay is being constructed.
The AAR Bench of D.P. Gojamgunde, Joint Commissioner of State Tax, and Priya Jadhav, Joint Commissioner of Central Tax observed that the activity in question was not transmission per se, nor incidental or ancillary to core service of electricity transmission.
The Bench ruled that permitting the use of a spare asset for a fixed duration against payment amounts to a supply of service akin to renting or temporary assignment of infrastructure and thus did not qualify for exemption under the cited notifications.
MSETCL cannot Claim GST ITC on Refund of Excess Deposit received from End Users after Completion of Work: AAR
In Re: M/s.Maharashtra State Electricity Transmission Company Limited CITATION : 2025 TAXSCAN (AAR) 122
The Maharashtra Authority for Advance Ruling (AAR) recently held that the Maharashtra State Electricity Transmission Company Limited (MSETCL) is not eligible to claim Input Tax Credit (ITC) in cases where it refunds the unutilised balance of deposits received from end users after completion of contracted work.
The AAR Bench comprising D.P. Gojamgunde, Joint Commissioner of State Tax, and Priya Jadhav, Joint Commissioner of Central Tax examined the submissions and noted that GST is a supply-based tax and credit of tax paid on inputs can only be retained if there is a corresponding taxable output supply.
In the present instance, the excess amount refunded does not relate to any taxable supply, and thus cannot form part of the value of supply under Section 15 of the CGST Act. Therefore, the Bench ruled that ITC to the extent relatable to such refunded amount is not admissible.
Maharashtra Electricity Transmission Co. Liable to Pay GST on Additional Deposit Received from End Users for Work Completion: AAR
In Re: M/s.Maharashtra State Electricity Transmission Company Limited CITATION : 2025 TAXSCAN (AAR) 122
The Maharashtra Authority for Advance Ruling (AAR) recently held that Maharashtra State Electricity Transmission Company Limited (MSETCL) is liable to pay Goods and Services Tax (GST) on additional deposits collected from end users to cover shortfalls in estimated project costs upon the final completion of works.
The Bench ruled that such payments, although received at a later stage are in lieu of consideration for a taxable supply and must be subjected to GST. The bench further clarified that the time of supply in such cases shall be the date of receipt of the additional deposit or the date of invoice, whichever may be earlier, as per the provisions of the CGST Act.
Accordingly, the AAR concluded that MSETCL is liable to pay GST on additional deposits received from dedicated consumers after project completion to cover any cost shortfall in respect of works undertaken.
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