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CA Final · Indirect Tax Laws · Advance Ruling

Meridian Pharma Ltd obtained an advance ruling in 2024 on the taxability of a service it supplies. In 2026 the Government amends the relevant notification so that the law on which the ruling relied has changed. A distinct person of Meridian with a different PAN is not the applicant. Which statement is correct under section 103 of the CGST Act, 2017?

A ruling binds only the applicant and the concerned or jurisdictional officer in respect of that applicant, and only so long as the supporting law, facts or circumstances remain unchanged. Because the law changed, the ruling no longer binds Meridian, and it never extended to other registered persons.

  1. AThe ruling remains binding on Meridian and its jurisdictional officer regardless of the change in law
  2. BThe ruling is binding on Meridian and the jurisdictional officer in respect of Meridian only unless the law, facts or circumstances supporting it have changed, so it ceases to bind after the changeCorrect
  3. CThe ruling becomes binding on all registered persons supplying the same service
  4. DThe ruling is binding only on the jurisdictional officer and not on Meridian

Explanation

Section 103(1) makes the ruling binding only on the applicant and the concerned or jurisdictional officer in respect of the applicant. Section 103(2) says it is binding unless the law, facts or circumstances supporting it have changed. Since the law changed, the ruling no longer binds, and it never bound other persons.

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