Gujarat AAAR Disallows ITC on Expenses Incurred for Buyback of Shares as Securities are Outside GST Purview

Last updated: 24 October 2025

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The Gujarat Appellate Authority for Advance Ruling (AAAR) has decided that Input Tax Credit (ITC) cannot be claimed on expenses incurred for the buyback of shares. This is because shares are considered 'securities' and fall outside the definition of 'goods' or 'services' under the Goods and Services Tax (GST) law. Therefore, any transactions involving securities, including buybacks, are not subject to GST, and consequently, ITC on related expenses is disallowed.

Court :
Gujarat AAAR

Brief :
The Gujarat AAAR in Gujarat In the matter of M/s. Gujarat Narmada Valley Fertilizers & Chemicals Ltd. [Advance Ruling Appeal No. GUJ/GAAAR/APPEAL/2025/17, order dated September 22, 2025] held that Input Tax Credit (ITC) is not admissible on expenses incurred for the buyback of shares, as shares being 'securities' do not qualify as goods or services under the GST law, and hence the transaction falls outside the ambit of GST.

Citation :
Advance Ruling Appeal No. GUJ/GAAAR/APPEAL/2025/17, order dated September 22, 2025

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Attached File : 671907_5884_aaar_gujarat_narmada_valley_fertilizers.pdf

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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