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CA Final · Indirect Tax Laws · Advance Ruling

Himalaya Steels Ltd obtained an advance ruling from the Authority on a supply it makes. Later, the Government amended the law so that the provision on which the ruling rested changed. Rajan Traders, an unrelated registered person in the same State making a similar supply, also wants to rely on this ruling. Which statement is correct under section 103 of the CGST Act, 2017?

The ruling binds only the applicant, Himalaya Steels, and the concerned or jurisdictional officer in respect of that applicant. It does not extend to Rajan Traders. Further, it binds only unless the law, facts or circumstances supporting it change, and the amendment in law removes that binding effect.

  1. AThe ruling binds only Himalaya Steels and the officers in respect of it, and it ceases to bind once the supporting law has changedCorrect
  2. BThe ruling binds Himalaya Steels and Rajan Traders, and continues to bind despite the change in law
  3. CThe ruling binds all registered persons in the State, but only until the law changes
  4. DThe ruling binds only the officers, and never the applicant, since the law has changed

Explanation

Under section 103(1), a ruling by the Authority or Appellate Authority binds only the applicant and the concerned or jurisdictional officer in respect of the applicant. Rajan Traders is not bound or protected. Under section 103(2), the ruling binds only unless the law, facts or circumstances supporting it have changed, so the change in law ends its binding effect.

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