The advance ruling mechanism under GST is designed to provide taxpayers with clarity and predictability on critical issues such as classification, tax rates, and exemptions. However, this remedy is subject to strict limitations to prevent conflicting decisions and parallel adjudication. In a recent ruling, the Tamil Nadu Authority for Advance Ruling (AAR) reaffirmed this principle by rejecting an application where the same questions on classification and exemption were already being examined by the jurisdictional authorities. The decision highlights the statutory bar under Section 98(2) of the CGST Act and underscores the importance of ensuring that no identical proceedings are pending before seeking an advance ruling.
Case Details
Case Title: Advance Ruling Application Rejected as Identical Proceedings on Classification and Exemption Were Already Pending
Forum: Authority for Advance Ruling (AAR) – Tamil Nadu
Citation: [2025] 180 taxmann.com 231 (AAR – Tamil Nadu)
Date of Ruling: 25 September 2025
Reported On: 15 November 2025
Subject: GST – Maintainability of Advance Ruling Application
Background
The applicant approached the Tamil Nadu Authority for Advance Ruling seeking clarity on the classification of certain goods/services and the availability of related GST exemptions. The objective was to obtain a binding ruling to ensure tax certainty and avoid future disputes.
However, during preliminary verification, the AAR observed that proceedings on the same questions—classification and exemption—were already pending before the jurisdictional GST authorities. These ongoing proceedings arose from enquiries initiated prior to the filing of the advance ruling application.
Core Issue
Whether an advance ruling application under Section 97 of the CGST/TNGST Act is maintainable when identical issues are already:
- Pending,
- Under investigation,
- Examined, or
- Subject to any proceedings
before the GST authorities.
Applicant’s Contention
The applicant argued that:
- The advance ruling mechanism is intended to provide clarity to taxpayers.
- The pending proceedings were at a preliminary stage and should not bar the AAR from issuing a ruling.
- Since no show-cause notice had been issued, the matter could not be considered as “pending” in the strict legal sense.
AAR’s Observations
The AAR relied on the second proviso to Section 98(2) of the CGST Act, which mandates rejection of an advance ruling application if:
- The question raised in the application is already pending or decided in any proceeding in the case of an applicant under the provisions of the Act.
The AAR noted:
- The jurisdictional authorities had already begun evaluating the classification and exemption issues raised by the applicant.
- The scope of the enquiry overlapped entirely with the questions presented before the AAR.
- The law intends to prevent parallel proceedings and avoid potentially conflicting positions.
Decision
The AAR rejected the application as non-maintainable, holding that:
- Since identical questions on classification and exemption were already under examination by the department, the bar under Section 98(2) squarely applied.
- The advance ruling mechanism cannot be used to pre-empt or influence ongoing proceedings.
Key Takeaways
- An advance ruling cannot be sought when the same issue is already being examined by GST authorities.
- Even pre-SCN enquiries or investigations can trigger the bar if they involve identical questions.
- Taxpayers must ensure no overlapping proceedings exist before approaching AAR.
Conclusion
The Tamil Nadu AAR’s ruling reiterates a crucial statutory limitation: the advance ruling mechanism cannot be invoked when identical issues are already under scrutiny by GST authorities. By rejecting the application at the threshold, the AAR emphasized that taxpayers must ensure the absence of overlapping proceedings before seeking clarity under Section 97. The decision reinforces the objective of Section 98(2)—to prevent conflicting interpretations and safeguard the integrity of the adjudication process. For taxpayers, the takeaway is clear: advance rulings are a tool for certainty, not a parallel route to influence or circumvent ongoing departmental enquiries.