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CA Final · Indirect Tax Laws · Advance Ruling

Bharat Polymers received a favourable advance ruling in 2024 on the rate applicable to its product. In 2026 the law on which the ruling relied was amended, changing the rate. Under section 103(2) of the CGST Act, what is the position of the ruling?

The ruling stops being binding. Section 103(2) provides that an advance ruling binds only unless the law, facts or circumstances supporting it have changed. Because the relevant law was amended, the supporting basis changed and Bharat Polymers cannot rely on the earlier ruling.

  1. AIt remains binding for the original validity period regardless of amendment
  2. BIt is binding only unless the law, facts or circumstances supporting it have changed, so it ceases to bind hereCorrect
  3. CIt becomes binding on all registered persons having the same PAN
  4. DIt is automatically converted into a ruling of the National Appellate Authority

Explanation

Section 103(2) says the ruling is binding unless the law, facts or circumstances supporting the original ruling have changed. Since the law changed, the ruling no longer binds. The idea of a fixed validity period regardless of change is not in the provision.

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