GST Advance Ruling KER/08/2025 on Input Tax Refunds and Exemptions
- Ruling
- ADVANCE RULING No.KER/08/2025 Dated 16.04.2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
In short
The Authority for Advance Ruling (AAR) in Kerala examined whether a research foundation could claim Goods and Services Tax (GST) refunds on construction costs and tax exemptions on future ticket sales. The foundation asked if they could recover input tax paid on building materials and works contracts, and if their nursery ticket sales would be tax-free.
What has changed
How it worked before
Many businesses often assume that non-profit or research-oriented entities might automatically qualify for tax relief or refunds on infrastructure spending. Before this ruling, there was uncertainty regarding whether such foundations could treat construction expenses as refundable input tax under Section 54(3) of the Central Goods and Services Tax (CGST) Act.
What has changed
The Authority ruled that the foundation is not eligible for these refunds or exemptions because they failed to prove they met the specific legal criteria. In practice, this means you cannot claim a refund for construction-related GST unless you can clearly demonstrate that your business model falls under specific categories like zero-rated supplies or an inverted duty structure.
Who this affects
This ruling is relevant to research foundations, non-profit organizations, and any business planning significant construction projects who are hoping to recover GST paid on building materials or contractor services.
What you should do
You should not assume this ruling applies to your specific business, as an advance ruling is only binding on the applicant and their local tax office. If you are considering a similar claim, consult with a tax professional to identify the exact legal notifications that apply to your situation rather than relying on general arguments for relief.
The ruling in detail
Authority for Advance Ruling
M/s. M.S.SWAMINATHAN RESEARCH FOUNDATION
ADVANCE RULING No.KER/08/2025 Dated 16.04.2025 · Keralam
Questions before the authority
- Whether the Foundation is eligible to get refunds of input tax paid on its purchases of building materials under section 54(3) of the GST Act?
- Whether the Foundation is eligible to get refund of tax paid to the works contractor under section 54(3) of the GST Act?
- Whether the Foundation will be eligible for exemption on sale of tickets when the nursery becomes functional in a full-fledged manner?
Facts
The applicant is a research foundation initiating a project for the conservation of endangered plant species and the development of plant nurseries. They intend to construct buildings and hire contractors for this purpose. The applicant sought an advance ruling on the eligibility for input tax refunds on construction-related expenses and potential GST exemptions for future ticket sales.
Held
The Authority ruled against the applicant on all three questions. It held that there are no grounds to grant refunds of input tax paid on building materials or works contracts under section 54(3). Furthermore, it denied the request for an exemption on the sale of tickets for the nursery.
Reasoning
The Authority noted that refunds under section 54(3) of the CGST Act are strictly limited to cases of zero-rated supplies or inverted duty structures, neither of which was substantiated by the applicant. Regarding the exemption request, the applicant failed to cite any specific notification or serial number under which the exemption could be claimed. The Authority emphasized that it cannot entertain general pleas for exemption that do not reference specific legal provisions. Consequently, the application was rejected for lack of evidence and failure to meet the statutory requirements for the relief sought.
Provisions relied on
- Section 54(3) of the CGST Act, 2017
- Section 97(2) of the CGST Act, 2017
- Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017
For the practitioner
This ruling serves as a reminder that applicants must provide specific evidence and legal grounding when seeking refunds or exemptions. It confirms that the Authority will not grant relief based on **general assertions** of being on par with the government. Practitioners should note that the ruling does not establish a precedent for the substantive merits of such claims, but rather highlights the **procedural failure** to substantiate the application.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/6-ar_order_m.s.swaminathan_research_foundation.pdf
Legibility of the scan, as read: high.
Prepared 05-09-2026.
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