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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Assessment, Audit, Scrutiny, Demand and Recovery, Advance Ruling, Appeals and Revision

Meera Textiles Pvt Ltd obtained an advance ruling on the rate applicable to a fabric it plans to supply. Later, a different taxpayer, Kaveri Traders, supplies the same fabric. Which statement is correct?

The ruling binds only Meera Textiles as the applicant and the concerned or jurisdictional officers in respect of it. It is not a general precedent, so Kaveri Traders is not bound by it, and no Council ratification is needed.

  1. AThe ruling is binding only on the applicant and on the concerned officer or jurisdictional officer in respect of the applicant, not on Kaveri TradersCorrect
  2. BThe ruling binds all taxpayers in India dealing in the fabric
  3. CThe ruling binds only Kaveri Traders because it supplied later
  4. DThe ruling binds no one until the GST Council ratifies it

Explanation

An advance ruling is binding only on the applicant who sought it and on the concerned and jurisdictional officers in respect of that applicant. It does not operate as a general ruling for other taxpayers such as Kaveri Traders, so the first option is correct.

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