Goa AAAR Refuses to Decide on Merits of River Sal Dredging Exemption to Maintain Judicial Propriety:

Goa AAAR Refuses to Decide on Merits of River Sal Dredging Exemption to Maintain Judicial Propriety The present appeal was filed by M/s Vaibhavi Dredging, South Goa, before the Appellate Authority for Advance Ruling (AAAR) Goa under Section 100(1) of the Central Goods and Services Tax Act, 2017 and the Goa Goods and Services Tax Act, 2017. The appellant challenged the decision of the Goa Authority for Advance Ruling (AAR), which was passed vide Order No. GOA/GAAR/01 of 2023-24 dated November 25, 2025.

Background of Case

The appellant is engaged in the taxable business of dredging, desilting and related support services and was given a contract by the Captain of Ports Department, Government of Goa. The appellant approached the AAR to clarify if the services that the appellant provides are qualified for tax exemption under Notification No. 12/2017-CT(Rate). But the lower authority rejected the claim for exemption and aggrieved by the same, the appellant has filed the present appeal.

Question Before AAR Goa

The appellant had sought an advance ruling on the following question: "Applicability of Exemption under Sl. No. 3 (for Pure Services) or 3A (for composite supply where the supply of goods does not constitute more than 25% of the total value) of the Exemption Notification No. 12/2017-CT (Rate) dated June 28, 2017, as amended, regarding the dredging or desilting and other support services provided to the Captain of Ports Department, Government of Goa."  

Ruling by AAR Goa

On November 25 2025, AAR Goa passed an order clarifying that the desilting services supplied by the appellant were not covered under either Entry No. 3 or Entry No. 3A of Notification No. 12/2017-Central Tax (Rate). It observed that the exemption can only be claimed when there is an actual legislative devolution of tasks to local bodies. Being aggrieved, the appellant preferred an appeal before the Appellate Authority of Advance Ruling under Section 100(1) of the CGST Act, 2017. The jurisdictional SGST Authorities issued a show cause notice and passed an order dated 23/05/2025 under Section 73 of the SGST Act and CGST Act.

Ruling by AAAR Goa

AAAR Goa disposed of the appeal without expressing any final opinion on the merits of the case and did not act on any finding on the eligibility of the exemption, as it was put on record that the State Tax authorities of the jurisdiction have already conducted a parallel scrutiny and have issued a demand order under Section 73. In order to maintain judicial propriety, the AAAR refrained from passing any verdict on the merits of the case.