AAR Rejects Advance Ruling Application if Same Issue Already Pending in GST Proceedings

Centax Editorial Board

March 18, 2026

• 2 min. read

Case Details: In re: Murali Pharmacy (2026) 40 Centax 24 (A.A.R.-GST-T.N.)

Judiciary and Counsel Details

S/Shri C. Thiyagarajan, Member (Central Tax) & B. Suseel Kumar, Member (State Tax)

Facts of the Case

The applicant was a proprietorship concern engaged in the supply of medicines and medical items and claimed eligibility for threshold exemption from payment of tax under Notification No. 10/2019-CT upon enhancement of the turnover limit to Rs. 40 lakhs for suppliers of goods. Despite such enhancement, the applicant continued to remain registered under GST and did not discharge tax liability on its outward supplies. The department initiated scrutiny proceedings in respect of non-payment of tax with reference to the turnover disclosed in GSTR-1 and issued a notice in Form ASMT-10 seeking an explanation from the applicant regarding its claim of exemption. During the pendency of the said proceedings, the applicant filed an application before the Authority for Advance Ruling (AAR) seeking clarification on its liability to tax on supplies made below Rs. 40 lakhs and the availability of exemption to an already registered person. Thereafter, the scrutiny proceedings culminated in orders passed in Form GST DRC-07 determining the tax liability on the same issue. The matter was accordingly placed before the AAR.

AAR Held

The AAR held that the first proviso to section 98(2) of the CGST Act clearly bars admission of an application where the same question is pending or has already been decided in any proceedings under the Act. It was observed that the issue raised by the applicant regarding liability under the claimed threshold exemption was identical to the issue examined in the scrutiny proceedings initiated by the department. The authority further noted that such proceedings had been initiated prior to the filing of the application and had also culminated in an adjudication determining the liability of the applicant. In view of the statutory bar contained in section 98(2) of the CGST Act, it was held that the application was not maintainable. Accordingly, the advance ruling application was rejected.