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CA Final · Indirect Tax Laws · Advance Ruling

Arvind Engineering Ltd obtained an advance ruling in 2025 on the tax treatment of a particular supply. In 2026 the relevant law governing that supply is amended. Arvind continues to rely on the ruling for supplies made after the amendment. Which statement is correct?

The ruling cannot be relied on after the amendment. Under section 103(2) an advance ruling is binding only so long as the law, facts or circumstances supporting it remain unchanged. A change in law removes that support, so it no longer binds.

  1. AThe ruling remains binding forever because it was validly pronounced
  2. BThe ruling is binding only unless the law, facts or circumstances supporting it have changed, so it cannot be relied on after the amendmentCorrect
  3. CThe ruling stays binding on Arvind but ceases to bind the officer
  4. DThe ruling becomes binding on all registered persons having the same PAN

Explanation

Section 103(2) says the ruling is binding unless the law, facts or circumstances supporting the original ruling have changed. The amendment changes the law supporting it, so Arvind cannot rely on it for later supplies. Binding force on all PAN holders applies only to National Appellate Authority rulings under section 103(1A), not here.

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