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 August 02, 2025 to August 09, 2025. Maintaining Micro-Compost Centres and Processing Wet Waste from Chennai Corporation Classified as 'Waste Treatment and...
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 August 02, 2025 to August 09, 2025.
Maintaining Micro-Compost Centres and Processing Wet Waste from Chennai Corporation Classified as 'Waste Treatment and Disposal Services': AAR
In Re:Nellai Motors CITATION : 2025 TAXSCAN (AAR) 137
The Tamil Nadu Authority for Advance Ruling (AAR) recently clarified on the appropriate classification of services of maintaining micro-compost centres and processing of wet waste rendered by an applicant to the Greater Chennai Corporation.
The AAR Bench comprising Balakrishna S (CGST Member) and B. Suseel Kumar (SGST Member) referred to the Scheme of Classification of Services provided in the Annexure to Notification No. 11/2017-Central Tax (Rate) and observed that SAC 9994 dealt with “Sewage and waste collection, treatment and disposal and other environmental protection services”.
No GST on Maintenance of Micro-Compost Centres & Processing Wet Waste from Chennai Corporation: AAR Rules Tax Exemption
In Re: Nellai Motors CITATION : 2025 TAXSCAN (AAR) 137
The Tamil Nadu Authority for Advance Ruling (AAR) was recently met with a query whether the services of maintaining micro-compost centres and processing wet waste provided by the Greater Chennai Corporation qualify as “pure services” and are thus exempt from the levy of Goods and Services Tax (GST) as per Serial No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017 and as amended from time to time.
The AAR Bench comprising Balakrishna S, (CGST Member) and B. Suseel Kumar, (SGST Member) examined the nature of the service rendered by the applicant and classified it under SAC 99943 - Waste Treatment and Disposal Services, specifically under Heading 9994 of Notification No. 11/2017-C.T. (Rate) since the activity involved treatment of wet waste and not collection.
Renting of Residential Property to Govt for Backward Class Girl’s Hostel Exempt from GST: AAR
In Re: RAVINDRA NAVNATH SATPUTE CITATION : 2025 TAXSCAN (AAR) 138
The Maharashtra Authority for Advance Ruling (AAR) ruled that the supply of renting services provided to the Social Justice and Special Assistance Department of Maharashtra Government for operating a girl's hostel for backward classes is exempt from GST as pure services under Entry 3 of Notification No. 12/2017-CT (Rate).
The two-member bench, comprising D.P. Gojare (Joint Commissioner, State Tax) and P. Vinitha Sekhar (Additional Commissioner, Central Tax), observed that the renting service is pure and provided to the State Government for girl's hostel accommodation, aligning with social justice schemes for backward classes under Articles 243G and 243W.
The bench noted that Entries 25-27 of the Eleventh Schedule (women and child development, social welfare, welfare of weaker sections) and Entries 3 and 9 of the Twelfth Schedule (economic and social development, safeguarding weaker sections) cover such activities.
Advance Ruling Sought on Taxability of Supplier’s Transactions and Local Authority Status for Thane Municipal Transport Undertaking Not Admissible u/s 97: AAR
IN Re: M/s. THANE MUNICIPALTRANSPORT UNDERTAKING CITATION : 2025 TAXSCAN (AAR) 139
The Maharashtra Authority for Advance Ruling (AAR) held that the questions raised do not qualify under Section 97(2) of the Central Goods and Services Tax (CGST) Act, 2017, and involve taxability of transactions by the applicant’s suppliers, which is beyond the binding scope of advance rulings.
The AAR bench comprising D.P. Gojamgunde, Joint Commissioner of State Tax, and Priya Jadhav, Joint Commissioner of Central Tax observed that the first question on ‘local authority’ status does not fall under any clause of Section 97(2) of the GST Act.
The AAR emphasized that advance rulings under Section 103(1) bind only the applicant and jurisdictional officers, not suppliers. The bench observed that allowing such rulings would affect non-parties without appeal rights under Section 100, which is not envisaged under the GST framework.
Cumulative Income Tax Paid by Firm and Partners Not Eligible for Rule 86B Exemption: AAR
In Re: M/s AADINATH AGROINDUSTRIES CITATION : 2025 TAXSCAN (AAR) 140
The Rajasthan Authority for Advance Ruling (AAR) has clarified that the cumulative income tax paid by a partnership firm and its partners is not eligible for exemption under Rule 86B of the Central Goods and Services Tax Rules, 2017.
The Tribunal noted that Rule 86B provides relief from the cash payment requirement only if any two partners have each paid more than ₹1 lakh in income tax in each of the last two financial years. There is no provision of exemption for such conditions in the said rule where exemption can be considered for total income tax paid by the partners and the firm together. In view of above, the exemption as per Rule 86B(a) is not applicable on the taxpayer.
Cumulative ₹1L Income Tax Paid by Firm and Partners Not Sufficient for Rule 86B Exemption: AAR
In Re: M/s AADINATH AGROINDUSTRIES CITATION : 2025 TAXSCAN (AAR) 140
The Rajasthan Authority for Advance Ruling (AAR) has ruled that exemption under Rule 86B of the CGST Rules is not applicable where neither the individual partner nor the firm has paid more than ₹1 lakh as income tax in each of the last two financial years, even if the cumulative tax paid by the firm and all partners together exceeds ₹1 lakh.
The Advance Ruling Bench comprising Utkarsh (Central Tax Member) and Dr. Akhedan Charan (State Tax Member) noted that there is no provision of exemption for such conditions in the said rule, where exemption can be considered for total income tax paid by the partners and the firm together and the exemption as per Rule 86B(a) is not applicable on the taxpayer. Therefore, the applicant does not qualify for the exemption.
Subcontractor’s Labor Services in PMAY Project is Not 'Pure Labor' Contract: AAR Rules No GST Exemption
In Re: M/s BUILD LAYERCONSTRUCTIONS CITATION : 2025 TAXSCAN (AAR) 141
The Rajasthan Authority for Advance Ruling ( RAAR ) has ruled that labor services provided by a subcontractor for a Pradhan Mantri Awas Yojana (PMAY) housing project do not qualify as a 'pure labor' contract and are not exempted from Goods and Services Tax (GST) under Notification No. 12/2017-Central Tax (Rate), Entry 10.
The bench comprising Utkarsh (Central Tax Member) and Dr. Akhedan Charan (State Tax Member) thus found that it cannot be stabilized that the applicant is working for Pradhan Mantri Awas Yojana and the service provided by the applicant for construction of flats is not covered under entry No 10 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
18% GST on Sub-contracted Construction Services for PMAY: AAR Classifies Service Under HSN 9954
In Re: M/s BUILD LAYERCONSTRUCTIONS CITATION : 2025 TAXSCAN (AAR) 141
The Rajasthan Authority for Advance Ruling (AAR) has clarified that labor services provided by a subcontractor for a Pradhan Mantri Awas Yojana (PMAY) housing project do not qualify as a 'pure labor' contract and are liable to 18% GST services, which are classified under HSN code 9954 (xii).
The bench comprising Utkarsh (Central Tax Member) and Dr. Akhedan Charan (State Tax Member) found that the construction services fall under section 5 of Chapter 99. Hence, the service provided by the taxpayer falls under HSN code 9954 (xii) with GST rate 18%.
AAR Rejects GST ITC Refund Clarification Application citing Jurisdictional Restrictions u/s 97(2)
In Re: M/s. Saket International CITATION : 2025 TAXSCAN (AAR) 142
The Gujarat Authority for Advance Ruling (AAR) has rejected an application seeking clarification whether the refund of Goods and Services Tax (GST) Input Tax Credit (ITC) was restricted on the outward supply of products in which a notified product is used as an inward supply.
The bench comprising P.B. Meena (Central Member) and Kamal Shukla (State Member) rejected the application as advance ruling under Section 95 and Section 97 is limited to seven specific issues listed in Section 97(2), and ‘refund’ is not amongst the seven issues listed in Section 97(2) and thus outside the jurisdiction of Section 97(2) of the CGST Act.
GST on Construction under JDA: AAR clarifies Composite Sale Deed Execution Does not Fall u/Schedule III as 'Sale of Land'
In Re: M/s. SripriyaConstructions Private Limited CITATION : 2025 TAXSCAN (AAR) 143
The Tamil Nadu Authority for Advance Ruling (AAR) has ruled that a composite sale deed executed by a landowner for undivided share of land (UDS) and the area constructed under Joint Development Agreement (JDA) will not qualify for exclusion under Item No.5 of Schedule III of the CGST/TNGST Act, which deals with "sale of land".
The bench comprising Balakrishna R (Central Member) and B Suseel Kumar ( State Member) observed that, in a composite contract where consideration is not separated, the liability is on the entire transaction value. Even if the entire property is registered under a single agreement without separate identification of land and construction costs, GST would still apply.
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