Tamil Nadu AAAR Rejects Advance Ruling Appeal due to Delay
The appellant, Kanishk Steel Industries, is a limited company that manufactures and supplies different types of steels, classified under HSN 72165000, 72141000 and attracts a GST rate of 18%. The appellant wanted to replace its current 10.2 MW Windmill power plant with a Solar Power plant with the same capacity of 10.2 MW. The appellant had first filed an application before the Tamil Nadu Authority for Advance Ruling (AAR) asking the following questions:
“(i) they are eligible to take input tax credits on inputs/capital goods or input services of the items used in Design, engineering, Installation of 10.2 MW of the Solar Power plant as per MNRE & IEC standards wherein the generation of electricity from such solar plant is used for captive consumption; and
(ii) they are eligible to take input Tax credit for inputs and services for running the solar plant.”
The Tamil Nadu AAR held that the appellant is not eligible to claim Input Tax Credit (ITC) on the goods or services. Electricity is considered an exempt supply and is taxed at a Nil rate of GST. The electricity is first given to TANGEDCO, which is given as credit for adjustment towards the power consumed in the manufacturing factory. So, it is not captive consumption, but a supply of exempt goods. As per the GST law (Section 17(2) and Rule 43), the applicant cannot claim ITC for making exempt supplies.
The appellant then approached the Tamil Nadu Appellant Authority for an Advance Ruling, requesting it to declare that wheeling agreement with TANGEDCO does not amount to ‘supply’ under GST and to quash the order of AAR, which denied the ITC on the solar power plant.
However, the AAAR observed that the AAR’s order was communicated to the company on 07.02.2025, which was received by the applicant on 08.02.2025. With this date, the last date for filing the appeal would be 10.03.2025. Additionally, the law allows a maximum extension of another 30 days, which would be 09.04.2025. The applicant filed the appeal on 23-06-2025. The authority noted that there has been a delay of 105 days.
The authority further said that it is not a court and therefore, it has no power to cannot extend the time period to file the appeal. Accordingly, the Tamil Nadu AAAR rejected the appeal filed by Kanishk Steel Industries without looking into the facts of the case, as the appeal was delayed.
Case Citation: M/s Kanishk Steel Industries Ltd (Tamil Nadu AAAR); A.R. Appeal No.04/2025/AAAR; 15/09/2025
