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 August 09, 2025 to August 16, 2025.

Maida Pappad is ‘Snack Pellet’, Applies 5% GST Due to Extrusion Process, rules AAR

In Re: M/s. VKSamy Biscuits & Confectioneries CITATION : 2025 TAXSCAN (AAR) 144

The Tamil Nadu Authority for Advance Ruling (AAR) has held that so-called 'Maida Pappad' qualifies as extruded snack pellets, attracting 5% GST instead of the full exemption available for traditional papads.

The authority applied CBIC's clarification that unfried extruded snack pellets attract 5% GST (2.5% CGST + 2.5% SGST) since July 2023, rejecting the company's attempt to equate its product with lentil-based papads.

Members Balakrishna S and B. Suseel Kumar concluded that V K Samy's maida-based, extruded product fundamentally differed from traditional papads in composition, manufacturing process, and physical characteristics. The 5% GST rate for snack pellets manufactured through extrusion thus applied from July 27, 2023 onward.

GST ITC Denied for Cable Manufacturer as AAR Cites ‘Own Use’ u/s 17(5)(d)

In Re: M/s. KEIIndustries LLd. CITATION : 2025 TAXSCAN (AAR) 145

The Gujarat Authority for Advance Ruling (AAR) has denied input tax credit (ITC) for GST paid on construction services related to its 152-meter concrete tower housing Vertical Continuous Vulcanization (VCV) lines used to manufacture extra-high voltage cables. The decision hinged on interpreting whether the massive structure qualified as "plant or machinery" under GST law.

Members Kamal Shukla and P.B. Meena observed that KEI's concrete tower, while technically sophisticated, primarily served as structural support for manufacturing equipment rather than functioning as plant machinery itself. The ruling noted: "When construction is for the taxable person's own use either for personal purpose or as a business setting the input tax chain breaks under Section 17(5)(d)."

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In conclusion, the applicant is not eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacturing EHV cables in terms of Section 17(5)(c) and (d) of the CGST Act, 2017.

18% GST Rate applicable Geometry Compass Boxes, is a Mixed Supply, rules AAR

In Re: M/s.AMARDEEP UDYOG CITATION : 2025 TAXSCAN (AAR) 146

The Maharashtra Authority for Advance Ruling ( AAR ) held that geometry compass boxes supplied to municipal schools qualify as a 'mixed supply,' attracting the highest applicable GST rate of 18%.

The AAR examined whether the supply constituted a 'composite supply' (where items are naturally bundled) or a 'mixed supply' (where unrelated items are sold together). Referring to CBIC guidelines (2012), the authority noted that a true composite supply requires items to be inseparable in ordinary business practice. However, the geometry box in question contained standalone items like pencils and sharpeners, which are commonly sold separately.

Accordingly, the Maharashtra AAR determined that Geometry Compass Boxes qualify as a mixed supply under GST, classifying them under HSN 90178010 and applying the highest applicable tax rate of 18% (9% CGST + 9% SGST).

Geo Membrane for Water Proof Lining attracts 12 % GST: Maharashtra AAR

In Re: M/s.Lamifabs CITATION : 2025 TAXSCAN (AAR) 147

In a significant ruling, the Maharashtra Authority for Advance Ruling (AAR) has classified Geo Membrane laminated HDPE woven polymer lining as a 'technical textile,' thereby reducing the applicable GST rate from 18% to 12%.

The AAR examined the manufacturing process of the Geo Membrane, which involves weaving HDPE tapes of less than 5mm width into fabric and then laminating it with plastic to make it impermeable. The authority noted that the product meets the specifications of the Indian Standard IS:15351:2015, which categorizes it as an agro-textile for technical use.

The bench, comprising D.P. Gojamgunde and Priya Jadhav, upheld the applicant's interpretation and ruled that Geo Membrane for water-proof lining is correctly classified under HSN code 59111000, attracting a 12% GST rate.

GST Not Applicable on Facility Management Contracts for DM&RHS Hospitals: TN AAR

In Re: M/s.Quality Property Management Services Private Limited CITATION : 2025 TAXSCAN (AAR) 148

The Tamil Nadu Authority for Advance Ruling (AAR) has exempted hospital facility management services from paying GST on comprehensive facility management services rendered to 54 government hospitals, classifying these as activities supporting constitutionally mandated public health functions.

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Members B. Suseel Kumar and Balakrishna S analyzed the case through three key tests under Notification 12/2017: whether services were "pure" (not works contracts), provided to governmental authorities, and related to constitutional functions under Articles 243G/W.

The bench noted DM & RHS qualifies as a governmental authority under IGST Act definitions, being established by the state to discharge public health duties.

The AAR's constitutional interpretation approach may influence pending disputes about GST applicability on ancillary services supporting government functions. However, the ruling remains limited to identical factual scenarios where services demonstrably support activities listed in Articles 243G/W, with minimal goods involvement.

GST Breakthrough for Agro-Textiles Geo-Membrane Waterproof Liners Classified as Technical Fabric: AAR

In Re: M/s.Hari Om Flexopack Industries CITATION : 2025 TAXSCAN (AAR) 149

The Maharashtra Authority for Advance Ruling (AAR) has classified Geo-Membrane Waterproof Liners, used primarily in agriculture for water conservation, as technical textiles under Chapter Heading 5911 10 00 of the GST tariff. This decision brings clarity to the tax treatment of these products, which were previously classified under a residual plastics category.

The bench, comprising D.P. Gojangunde and Priya Jadhav, concluded that the product’s technical functionality and textile-based manufacturing process justify its classification under Heading 5911. This ruling provides much-needed clarity for manufacturers and ensures consistent GST treatment for similar agro-textile products. In conclusion the AAR has conclusively determined that 'Geo-Membrane for Waterproof Lining-Type-II' (as per IS:153151:2015) is appropriately classified under Tariff Item 5911 10 00 as a technical textile.

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