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 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 April 18, 2026 to April 25, 2026.
Oxygen Plant is Immovable Property, Not Merely ‘Plant & Machinery’: AAAR Denies GST ITC on Leasehold Rights
M/s. Inox Air Products Private Limited
CITATION : 2026 TAXSCAN (AAAR) 105
The Tamilnadu State Appellate Authority for Advance Ruling (AAAR) recently held that that no Input Tax Credit (ITC) may be availed on the Goods and Services Tax (GST) paid for the transfer of leasehold rights of the land to set up a medical and industrial oxygen plant, as the same is classified as an ‘immovable property’ and not “plant and machinery”.
Since the appellant sought to avail GST ITC on the service of transfer of leasehold rights for the construction of an immovable property which did not qualify as “plant and machinery”, AAAR ruled that the GST paid on such inward supply was blocked by the restriction under Section 17(5)(d).
GST Exemption to NSDC Training Institutes, Intervening Period Regularised on ‘as is where is’ Basis: Gujarat AAR
In Re: M/s. ASDM INSTITUTE PRIVATE LIMITED
CITATION : 2026 TAXSCAN (AAR) 132
The Gujarat Authority for Advance Ruling (AAR) ruled that training services provided by National Skill Development Corporation (NSDC) approved training institute are exempt from GST under the CGST Act, 2017 and clarified that the intervening period between 10.10.2024 and 15.01.2025 shall be governed on an “as is where is” basis.
The AAR after examining the statutory provisions and amendments observed that the training services provided by the applicant were intrinsically linked to NSDC’s skill development programmes and qualified as exempt services under Entry No. 69.
ITC on Foundation & Structural Support for Plant and Machinery Not Restricted By S. 17(5) of CGST: AAR
In Re: M/s. CPL Pharmaceuticals Private Limited
CITATION : 2026 TAXSCAN (AAR) 133
The Gujarat Authority for Advance Ruling (AAR) ruled that Input Tax Credit (ITC) is admissible on input services used for construction of foundation and structural support for plant and machinery and held that such services are not restricted under section 17(5) of the Central Goods and Service Tax Act, 2017.
The AAR ruled that ITC on input services used for construction of foundation and structural support for plant and machinery installed within the factory of the applicant, for manufacture of active pharmaceutical ingredients, is admissible and does not fall within the blocked credit provisions under section 17(5) of the CGST Act.
AAR Lacks Jurisdiction to Determine Biodegradability u/s 97(2), Compostable Bags Must Prove Biodegradability for 5% GST
CITATION : 2026 TAXSCAN (AAR) 134
The Authority for Advance Ruling (AAR), Rajasthan, has held that determining whether a product is biodegradable or compostable falls outside the scope of Section 97(2) of the Central Goods and Services Tax (CGST) Act and that the concessional Goods and Services Tax (GST) rate of 5% under Notification No. 9/2025-Central Tax (Rate) will apply only if the supplier establishes that the bags are actually biodegradable.
The AAR observed that the determination of biodegradability is a scientific and technical matter falling within the jurisdiction of environmental authorities and not within the scope of this authority under Section 97(2) of the CGST Act. It held that the submission of certifications doesn’t empower the authority to determine whether the product is biodegradable conclusively.
Rubber Rings used Exclusively in Irrigation Systems attract 5% GST if made of Hard Rubber: AAR
CITATION : 2026 TAXSCAN (AAR) 135
The Rajasthan Authority for Advance Ruling (AAR) recently clarified that “hard rubber” rings derived through vulcanisation process, and designed specifically for use in sprinkler and drip irrigation systems attract a Goods and ServicesTax (GST) at the rate of 5%, even when they are supplied separately as replacement parts.
The AAR affirmed that if the rubber rings are made of hard rubber classifiable under heading 8424, and solely used for irrigation purposes, they shall attract the concessional duty of 5%, but would fail to do so if they are not made of hard rubber or used for general purposes.
AAR Lacks Jurisdiction to Decide GST ITC Refund on Operating Charges paid to E-Commerce Platforms under IDS
CITATION : 2026 TAXSCAN (AAR) 136
The Karnataka Authority for Advance Ruling (AAR) recently rejected an application, holding that the AAR lacks jurisdiction to decide on matters relating to refund of accumulated Input Tax Credit (ITC) on Goods and Services Tax (GST), arising under the inverted duty structure (IDS) on operating charges paid to e-commerce platforms.
The AAR clarified that refund-related matters, including quantification and sanction of refund under IDS fall within the scope of Section 54 of the CGST Act and are to be dealt with by the appropriate jurisdictional officers under the statutory refund mechanism, and lie outside the ambit of matters specified in section 97(2) of the GST Act.
AAR Bars Advance Ruling u/s 98(2) as GST Exemption Question on Manpower Supply to Government Bodies Pending before HC
In Re: M/s Reliable Security and Intelligence ServicesPrivate Limited
CITATION : 2026 TAXSCAN (AAR) 137
The Authority for Advance Ruling (AAR), Odisha, declined to entertain the application filed by the applicant, holding that it could not rule on the Goods and Services Tax (GST) exemption on manpower services supply to government bodies as it is pending before the Orissa High Court, thereby attracting the bar under Section 98(2) of the Central Goods and Services Tax (CGST) Act, 2017.
The bench comprising Harsh Vardhan (Member, CGST) and Pratima Mohanty (Member, SGST) observed that the proper officer had already adjudicated the question of GST exemption, and the outcome was under challenge before the High Court. Accordingly, the application was held to be not admissible.
GST ITC applicable on Input Services used for Construction of Structural support for Installed Plant and Machinery within Factory: AAR
In Re: M/s. Cadila Pharmaceuticals Limited
CITATION : 2026 TAXSCAN (AAR) 138
The Authority for Advance Ruling (AAR) in Gujarat held that Input Tax Credit (ITC) for Goods and Service Tax (GST) would be applicable on input services used for construction of structural support for installed plant and machinery within factory.
AAR was of the opinion that the various equipment which are set up in the SRP would therefore qualify as machinery and would fall under the ambit of ‘plant and machinery’ in view of the Explanation to Section 17. Thus, the bench of Sushma Vora (SGST Member) and Vishal Malani (CGST Member) held that ITC would be available on foundation and structural supports.
Recovery of Electricity charges from members on Actual Basis liable to GST with Ceiling Limit: AAR
In Re: M/s Sandeep Vihar Owners Association
CITATION : 2026 TAXSCAN (AAR) 139
The Authority for Advance Ruling (AAR) in Karnataka held that recovery of electricity charges from Association members on actual basis is liable to Goods and Service Tax (GST) with ceiling limit.
The AAR held that the amount is liable to GST at the applicable rate, subject to the ceiling prescribed under Serial No. 77 of the said Notification. It was noted that the applicant does not satisfy all the conditions to be a “pure agent” for the electricity charges recovered from members.
Recovery of Water charges by Residence Association not Separate Supply of goods, Subject to GST if threshold Exceeded: AAR
In Re: M/s Sandeep Vihar Owners Association
CITATION : 2026 TAXSCAN (AAR) 139
The Authority for Advance Ruling (AAR) in Karnataka held that recovery of water charges by Resident Welfare Association (RWA) was not a separate supply of goods and would be subjected to Goods andService Tax (GST) if the threshold was exceeded.
It was observed that evidently the Association’s activities towards its members constitute a supply of services falling under the description “Services of Membership Organisations”. Additionally, it was noted that the Association is not selling water as goods to its members.
The two member bench of Kalyanam Rajesh Rama Rao and Sivakumar S Itagi held that the recovery of water charges from members is considered part of the overall maintenance services and cannot be treated as a separate supply of water (goods). Thus, GST would be applicable in accordance with the ceilings specified in the said Notification.
GST Payable on Corpus fund Collection by Residence Association at the Time of Receipt of Fund: AAR treats it as ‘Advances for Future Supply’
In Re: M/s Sandeep Vihar Owners Association
CITATION : 2026 TAXSCAN (AAR) 139
The Authority for Advance Ruling (AAR) in Karnataka held that Goods and Service Tax (GST) would be payable on the corpus fund collection by Residence Welfare Association (RWA) at the time of receipt of the fund. The AAR mentioned it should be treated as ‘advances for future supply’.
The two member bench of Kalyanam Rajesh Rama Rao and Sivakumar S Itagi held that such collections are to be treated as advances for future supply and GST is payable at the time of receipt of the corpus fund, as per the provisions of Section 13(2)(a) of the CGST Act which defines the time of supply as the receipt of advance amounts.
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