AAR and AAAR Weekly Round Up

This round-up analytically summarises the key rulings of the Goods and Services Tax Authorityfor Advance Ruling ( AAR ) and Appellate Authority for Advance Ruling ( AAAR ) reported at Taxscan.in during the period from March 16, 2026 to April 18, 2026.

Geomembranes Classifiable as Textile Products, Not Plastics: AAAR

In Re:M/s Shree Ambica Geotex Pvt. Ltd.

CITATION : 2026 TAXSCAN (AAAR) 104

In a recent ruling, the Gujarat Appellate Authority for Advance Ruling (AAAR) has dismissed an appeal filed by the Deputy Commissioner, Central GST, and upheld the earlier ruling that manufactured geomembranes are classifiable as textile products for technical use under HSN 5911 10 00.

The appellate bench Arti Kanwar (SGST Member) and Sunil Kumar Mall (CGST Member) noted that the manufacturing process described by Shree Ambica Geotex mirrored that in Ananta Synthetic Innovations, where the High Court had conclusively ruled in favor of classification under Chapter 59.

Accordingly, the AAAR affirmed the earlier ruling GUJ/GAAR/R/2022/46 dated 18.10.2022, holding that geomembranes HDPE woven fabrics laminated with LDPE/LLDPE are textile articles for technical use under HSN 5911 10 00, and dismissed the Department’s appeal.

GST Payable on Villa Construction Even If Work is Outsourced: AAR

In Re: M/s Varaha Land Private Limited

CITATION : 2026 TAXSCAN (AAR) 124

The Karnataka Authority for Advance Ruling (AAR) ruled that construction of villas by a developer is taxable as a supply of service under GST even if the construction work is outsourced to a third-party contractor and such transactions would be treated as composite supply with construction as the principal supply.

The bench comprising Kalyanam Rajesh Rama Rao and Shivakumar S Itagi observed that even though construction is outsourced, the applicant remains responsible for delivering the completed villa to the buyer and enters into agreements with customers. It explained that outsourcing does not remove the liability of the applicant as a supplier of service.

GST Applicable on RWA Charges Despite Threshold Exemption: AAR

In Re: M/s Sandeep Vihar Owners Association

CITATION : 2026 TAXSCAN (AAR) 125

The Karnataka Authority for Advance Ruling (AAR) has ruled that recoveries for water, electricity, and corpus fund by a Resident Welfare Association (RWA) form part of taxable "Home Owners Association services," even if claimed as exempt or pure agent reimbursements, and are subject to GST once the Rs 7,500 monthly per member threshold under Notification No. 12/2017-Central Tax (Rate) is exceeded.

The Authority, comprising Shri Kalyanam Rajesh Rama Rao (Central) and Shri Sivakumar S Itagi (State), held that under Section 7(1)(aa), RWAs and members are distinct persons, making all activities "supply" under SAC 999598. Water/electricity recoveries integrate into maintenance services (not standalone exempt goods), failing pure agent tests as bills are in RWA's name and used for its obligations.

Pure Labour Services for Construction of Single Residential Unit Exempt from GST: AAR

In Re: M/s House Construct Infra

CITATION : 2026 TAXSCAN (AAR) 126

The Karnataka Authority for Advance Ruling (AAR) ruled that pure labour services provided for construction of single residential dwelling units are exempt from Goods and Services Tax (GST) subject to conditions under Notification No. 12/2017-Central Tax (Rate).

The AAR observed that the applicant provides services only to individual owners of standalone residential houses and there is no transfer of property in goods in the execution of such contracts. It further observed that the services are not linked to any residential complex and are provided independently for single dwelling units.

The AAR stated that the services satisfy all the conditions prescribed under Entry No. 11 of Notification No. 12/2017-Central Tax (Rate) and hence qualify for exemption from GST. Accordingly, the supply of pure labour services for construction of single residential dwelling units is exempt from GST, subject to fulfilment of the specified conditions.

GST Exemption Denied: AAR Rules Medical Association’s Membership Services Not Purely Charitable

M/s. THE COIMBATORE BRANCH OF INDIAN MEDICAL ASSOCIATION

CITATION : 2026 TAXSCAN (AAR) 127

In a recent decision, the Authority for Advance Ruling (AAR), Tamil Nadu, has ruled that the Coimbatore Branch of the Indian Medical Association (IMA) cannot claim GST exemption on its membership-related activities.

The bench, C. Thiyagarajan, Commissioner/Member (CGST) and B. Suseel Kumar, Joint Commissioner/Member (SGST), ruled that the activities of collecting subscriptions and organising seminars for members are “business” under Section 2(17)(e) of the CGST Act and these activities are “supply” under Section 7(1)(aa), and the principle of mutuality does not exempt them.

Accordingly, member subscription fees are taxable under GST.

Rebate on Corporate Card Usage for Excise Duty Payment Not Liable to GST: AAR

In Re: M/s. John Distilleries Pvt. Ltd

CITATION : 2026 TAXSCAN (AAR) 128

The Authority for Advance Ruling (AAR) Karnataka held that rebates received from banks on the usage of corporate cards for statutory payments do not attract Goods and Services Tax (GST). The bench concluded that such incentives are mere transactions in money and lack the essential element of supply.

The Authority held that taxable value must be strictly confined to the consideration received in exchange for services that were rendered. The AAR observed that the rebate is a financial adjustment linked to card usage and not an independent supply of service by the applicant to the bank.

​The Bench comprising Kalyanam Rajesh Rama Rao (Central Member) and Sivakumar S Itagi, (State Member) ruled that the rebates represent a monetary adjustment and do not involve any supply of goods or services. Consequently, such transactions are not liable to GST under the CGST or KGST Acts.

AAR Holds Margin Scheme Inapplicable to Unregistered Dealer Selling Used Second‑Hand Cars under GST

In Re: Shri Kalyanam Rajesh Rama Rao

CITATION : 2026 TAXSCAN (AAR) 129

In a recent ruling, the Karnataka Authority for Advance Ruling (AAR) examined whether the “Margin Scheme” under GST applies to the purchase and resale of second-hand cars by an unregistered dealer.

The Karnataka AAR clarified that the valuation of second-hand car sales is governed by Rule 32(5) of the CGST Rules, subject to compliance with Notification No. 8/2018, and motor vehicles are classifiable under Heading 8703, with assessable value being the margin between sale and purchase price.

Unprocessed Water Supply in RWA attracts 18 % GST: AAR

In Re : M/s Prestige North West Country OwnersAssociations

CITATION : 2026 TAXSCAN (AAR) 130

The Karnataka Authority for Advance Ruling (AAR) has ruled that unprocessed water supply by a Resident Welfare Association (RWA) forms part of composite "Home Owners' Association services" and must be aggregated with maintenance charges for the Rs 7,500 monthly per member exemption threshold, making it taxable at 18% once exceeded.

The AAR concluded that water supply does not qualify for Entry 99 exemption (not independent goods) or pure agent exclusion, forming part of taxable Home Owners' Association services under SAC 999598; it aggregates for the Rs 7,500 threshold per Entry 77, with tax at 18% (9% CGST + 9% SGST) per Sl. No. 33 of Notification No. 11/2017-Central Tax (Rate) beyond that.

Printing Exam Question Papers for Universities Exempted from GST: AAR

M/s Codeword Process and Printers

CITATION : 2026 TAXSCAN (AAR) 131

The Authority for Advance Ruling (AAR) inKarnataka recently ruled on a Goods and Service (GST) Tax query, clarifying that printing examination question papers for universities was an exempted service.

The decision in the Rajiv Gandhi University of Health Sciences (2024) case was taken into consideration. The bench also held that activities such as printing of question papers, which are indispensable and integrally connected to the conduct of examinations, cannot be divorced from the examination process.

The members of the bench, Kalyanam Rajesh Rama Rao and Sivakumar S Itagi, finally held that the services provided by the applicant are eligible for exemption from GST as per the Notification No. 12/2017-Central Tax (Rate).

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