AAR Rejects GST Application on Facilitation Services by Member-Volunteers

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  • Last Updated on 22 June, 2026

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GST on Facilitation Services 

Case Details: Indian Co-Operative Credit Society Ltd., In re - [2026] 187 taxmann.com 263 (AAR - KERALA)

Judiciary and Counsel Details

  • Jomy Jacob & Mansur M.I., Member
  • Saurabh Dixit, Adv. for the Appellant.

Facts of the Case

The applicant, a multi-state co-operative credit society, sought an advance ruling on the GST implications of amounts shared with its member-facilitators who voluntarily assisted in promoting lending and deposit activities among members. It contended that such transactions were governed by the principle of mutuality and therefore did not constitute a supply under the GST law. The applicant also sought rulings on the classification of such transactions and the availability of an exemption if GST was held applicable. The matter was placed before the Authority for Advance Ruling for the determination of the maintainability of the application.

AAR Held

The Authority for Advance Ruling held that the amounts shared by the applicant with the facilitators were in consideration of services rendered by the facilitators to the applicant and therefore related to supplies made by the facilitators rather than supplies undertaken by the applicant. It was observed that an advance ruling under Section 97 could be issued only in respect of supplies made by the applicant and not for supplies received by it from third parties. The Authority further noted that the issues relating to taxability of transactions between the applicant and its members had already been examined in earlier proceedings, attracting the bar under Section 98(2) of the CGST Act. Consequently, the application was held to be inadmissible and rejected without examining the merits of the questions raised.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied