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

Last updated: 24 October 2025
Quick Summary
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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Bimal Jain
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