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CA Final · Indirect Tax Laws · Advance Ruling

Kaveri Foods Ltd obtained an advance ruling from the Authority for Advance Ruling on the rate applicable to its packaged snack. Its competitor, Narmada Snacks Ltd, sells an identical product in the same State. Narmada did not apply for any ruling. Under section 103 of the CGST Act, 2017, the ruling is binding on:

The ruling binds only Kaveri Foods, the applicant, and the concerned or jurisdictional officer in respect of Kaveri Foods. Section 103(1) limits binding effect to the applicant and the officers dealing with it, so Narmada Snacks, which did not apply, is not bound.

  1. AKaveri Foods and the concerned or jurisdictional officer in respect of Kaveri Foods onlyCorrect
  2. BKaveri Foods and Narmada Snacks, as both deal in the same product
  3. CAll registered persons in the State dealing in similar snacks
  4. DOnly the jurisdictional officer, and not on Kaveri Foods

Explanation

Section 103(1) makes the ruling binding only on the applicant who sought it and on the concerned officer or jurisdictional officer in respect of that applicant. Narmada is neither, so it is not bound. The option extending it to all similar dealers is wrong because the ruling is not a general binding order.

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