AAR and AAAR Weekly Round Up

This round-up analytically summarises the key rulings of 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 November 1, 2025 to November 15, 2025.

GST ITC Admissible on Capital Goods Like Cables and Electrical Equipment Installed Outside Factory Premises: AAAR

In Re: M/s ElixirIndustries Private Limited CITATION : 2025 TAXSCAN (AAAR) 120

The Gujarat Appellate Authority for Advance Ruling (AAAR) ruled that Input Tax Credit (ITC) under Goods and Services Tax Act, 2017 is admissible on capital goods such as cables and electrical equipment installed outside factory premises when used for power transmission to the manufacturer’s factory.

The bench comprising Rajeev Topno (Member SGST) and Sunil Kumar Mall (Member CGST) observed that Elixir Industries had fulfilled all conditions for availing ITC and that the GAAR had correctly applied Section 16 of the CGST Act. The AAAR pointed out that the equipment used for transmission of electricity formed an essential part of the manufacturing setup and was not excluded from the definition of “plant and machinery.”

The AAAR upheld the GAAR ruling dated July 2, 2024, and rejected the Revenue’s appeal, stating that ITC on capital goods such as cables and electrical equipment used for power transmission outside factory premises is admissible under the CGST Act, 2017.

AAAR Upholds Denial of ITC on TR-6 Challans for Import IGST in Becton Dickinson Case

In Re: M/s. BectonDickinson India Private Limited CITATION : 2025 TAXSCAN (AAAR) 121

The Tamil Nadu State Appellate Authority for Advance Ruling (AAAR) has upheld the denial of Input Tax Credit (ITC) on IGST paid through TR-6 Challans and confirmed that time limits under Section 16(4) apply to reassessed bills of entry in the case of M/S. Becton Dickinson India Private Limited.

The Authority reasoned that through Section 20 of the IGST Act, the provisions of the CGST Act apply 'mutatis mutandis' to IGST, thereby extending the time limit provisions to bills of entry used for IGST imports. The time limit for availing ITC on the differential IGST paid was confirmed to begin from the date of re-assessment of the bill of entry.

The bench dismissed the appeal, upholding the original AAR's ruling by clarifying that TR-6 Challans, even with supporting documents, are not eligible for claiming ITC on import IGST, and that the time limits for availing ITC under Section 16(4) are applicable to reassessed bills of entry.

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GAAAR Upholds Denial of ITC on Share Buyback Expenses for Gujarat Narmada Valley Fertilizers & Chemicals Ltd

In Re: M/s. GujaratNarmada Valley Fertilizers & Chemicals Ltd. CITATION : 2025 TAXSCAN (AAAR) 122

The Gujarat Appellate Authority for Advance Ruling (GAAAR) upheld that expenses such as professional fees and legal charges relating to the buyback are not eligible for ITC, and further mandated the reversal of common input credit.

Gujarat Narmada Valley Fertilizers & Chemicals Ltd [GNFC] (applicant), a Public Limited Company engaged in the manufacturing of fertilizers and chemicals, initiated a share buyback program in December 2023. The company incurred various incidental expenses and sought an Advance Ruling (AR) on the eligibility of ITC for these costs.

The GAAAR confirmed that no ITC is admissible on share buyback expenses as they relate to transactions in securities, which are treated as 'exempt supply' for the purpose of ITC reversal under GST law. The authority rejected the appeal.

18% GST on Flow Meter Maintenance: AAR Rejects 'Composite Supply' Claim, Denies Nil Rate Benefit

In Re: M/s GreaterVisakhapatnam Smart City Corporation Limited CITATION : 2025 TAXSCAN (AAR) 188

The Andhra Pradesh Authority for Advance Ruling (AAR) has ruled that maintenance charges for flow meters do not form a composite supply with the supply of recycled water and are therefore taxable at 18%.

M/s Greater Visakhapatnam Smart City Corporation Limited (GVSCCL), the applicant, filed an application for Advance Ruling under Section 97 of the CGST Act, 2017. The applicant sought a ruling on whether the maintenance charges for flow meters, installed at the premises of Hindustan Petroleum Corporation Limited (HPCL), constitute a composite supply with the supply of recycled water, which is nil-rated.

The Authority, comprising Shri K. Ravi Sankar and Shri B. Lakshmi Narayana, analyzed the agreement and the definition of 'composite supply' under Section 2(30) of the CGST Act. The Authority observed that the tripartite agreement explicitly separates the consideration for the supply of recycled water from the maintenance charges, which are levied separately at a rate of 0.75% of the monthly bill. It noted that the maintenance of flow meters is a distinct service that can be provided independently by any third party and is not integral to the supply of water itself.

GST ITC Available on Hydrotreated Vegetable Oil/Renewable Diesel Used for GTA Services u/ Forward Charge Mechanism: AAR

In Re: M/S JAI AMBEYROADLINES PRIVATE LIMITED CITATION : 2025 TAXSCAN (AAR) 189

The Chhattisgarh Authority for Advance Ruling (AAR) recently ruled that a registered Goods Transport Agency (GTA) is eligible to claim Input Tax Credit (ITC) on the Goods and Services Tax (GST) paid for Hydrotreated Vegetable Oil (HVO)/Renewable Diesel that is used as fuel in trucks deployed for providing transportation services under the forward charge mechanism.

The Bench comprising Yachana Tambrey (Joint Commissioner / O/o Commissioner, State Tax) and Dr. Bura Naga Sandeep (Additional Commissioner / O/o Principal Commissioner, CGST & Central Excise, Raipur) examined Section 16 of the CGST Act, 2017 which permitted registered persons to claim ITC on goods or services used in the course or furtherance of business, provided that due tax has been paid, invoices are furnished and returns are filed.

The Authority observed that HVO/Renewable Diesel used for operating vehicles in transportation services qualifies as an input under Section 16, subject to fulfillment of all statutory conditions.

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Conditional GST ITC on Biofuels: AAR Permits Credit on Renewable Diesel Subject to S.16 Compliance

In Re: M/S JAI AMBEYROADLINES PRIVATE LIMITED CITATION : 2025 TAXSCAN (AAR) 190

The Chhattisgarh Authority for Advance Ruling (AAR) clarified that Input Tax Credit (ITC) on biofuels, specifically Hydrotreated Vegetable Oil (HVO) or renewable diesel used for providing taxable transportation services, may be availed under the Goods and Services Tax (GST) Act, but only upon strict adherence to the statutory conditions as prescribed under Section 16 of the Central Goods and Services Tax Act, 2017, making the eligibility conditional.

The bench comprising Yachana Tambrey and Dr. Bura Naga Sandeep observed that eligibility for ITC is conditional and not an absolute right. The Authority clarified that ITC on renewable diesel would only be available if the statutory conditions under Section 16 of the Central Goods and Services Tax Act, 2017 read with Section 17 are fully satisfied and subsequently verified by the relevant GST officers.

It further clarified that ITC on HVO or renewable diesel is permissible in principle when used for taxable GTA services. The benefit will only crystallise when documentary and factual compliance is demonstrated to the satisfaction of jurisdictional officers, making it a conditional rather than an automatic entitlement.

Pre- Packaged and Labelled export of shrimps up to 25 kgs attracts 5% GST: AAR

In Re: M/s Sandhya Aqua Exports Private Limited CITATION : 2025 TAXSCAN (AAR) 191

The Andhra Pradesh Authority of Advance Ruling ( AAR ) held that up to 25 kgs of exported processed frozen shrimp packed in pre-packaged and labelled pouches or boxes attracts 5% Goods and Service Tax ( GST ).

The Applicant, M/s Sandhya Aqua Exports Private Limited, Visakhapatnam, was engaged in the business of processing and exporting of shrimp, had filed an application in FORM GST ARA-01 under Section 97(1) of the Central Goods and Services Tax Act, 2017 and AP Goods and Services Tax Act, 2017.

The Bench comprising Sri. K. Ravi Sankar, Commissioner of State Tax (Member) and Sri. B. Lakshmi Narayana, IRS, Additional Commissioner of Central Tax (Member) observed and reviewed the matter.

The Bench found that individual inner packaging which ranges from 250 grams to 2.5 kilograms, as being printed had pre-determined quantity which falls within the ambit of ‘pre-packaged and labelled' goods meant for retail sale irrespective of the fact whether the outer packaging is printed or not, clarifying GST became liable to such packages already.

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