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CA Final · Indirect Tax Laws · Advance Ruling

Mehta Logistics Pvt Ltd obtained an advance ruling on the GST treatment of a service it supplies. Its competitor, Rathi Carriers, supplies an identical service and is not the applicant. Which statement correctly describes the binding effect of the ruling, as pronounced by the Authority or Appellate Authority under section 103(1)?

The ruling binds only Mehta Logistics, the applicant, and the concerned or jurisdictional officer in respect of that applicant. Under section 103(1) it does not bind other taxpayers such as Rathi Carriers, even if they supply an identical service.

  1. AIt binds all registered persons supplying the same service
  2. BIt binds only Mehta Logistics and the concerned or jurisdictional officer in respect of Mehta LogisticsCorrect
  3. CIt binds Mehta Logistics and Rathi Carriers because both supply identical services
  4. DIt binds only the officers and not the applicant

Explanation

Section 103(1) makes the ruling binding only on the applicant who sought it and on the concerned or jurisdictional officer in respect of the applicant. Rathi Carriers is not bound, so a ruling cannot be extended to a competitor merely because the facts are similar.

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