GST Advance Ruling Rejected Due to Pending Customs Assessment
Maharashtra AAR rejected an advance ruling application because the product classification was already under provisional customs assessment.
- Ruling
- NO. GST-ARA- 32/2017-18/B-40, dated 25.05.2018
- Dated
- 25 May 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Importer asked if animal feed supplement imports were exempt from GST.
- AAR rejected the application without deciding on the tax exemption.
- Pending customs provisional assessment barred the GST authority from hearing the case.
- Section 98(2) forbids advance rulings on questions already under active review.
In short
M/s Mosaic India Pvt. Ltd. filed an application before the Maharashtra Authority for Advance Ruling (AAR) under Order GST-ARA- 32/2017-18/B-40. The company imported animal feed supplements and asked whether its product was exempt from Goods and Services Tax (GST) under Tariff Heading 2309. However, its import consignments were already undergoing provisional assessment by customs authorities regarding classification and Integrated Goods and Services Tax (IGST).
What has changed
How it worked before
Businesses often assumed they could apply for a GST advance ruling to clear up rate confusion even if their imports were under provisional assessment by customs. Many believed provisional customs checks did not count as official pending proceedings that would bar a GST ruling.
What has changed
The authority rejected the application at the admission stage under Section 98(2) of the Central Goods and Services Tax (CGST) Act, 2017. It held that a provisional assessment under the Customs Act involving IGST counts as an ongoing proceeding. Therefore, an applicant cannot seek an advance ruling on a question that is already under active review by customs officers.
Who this affects
Importers and businesses in India whose product classification or tax rate is already being examined under provisional assessment by customs or GST officers.
An example
A company imports raw materials and pays IGST based on a provisional assessment while customs reviews the product category. To speed up a final answer, the company files an application with the GST advance ruling authority asking for the correct tax rate. Based on this decision, the authority will reject the application upfront because the classification question is already pending with customs.
What you should do
Before applying for a GST advance ruling, verify that your specific product classification or tax question is not already part of an ongoing audit, inquiry, or provisional assessment. Remember that an advance ruling decision binds only the specific business that asked for it and its tax officers.
If you do nothing
If you apply for an advance ruling while parallel customs or GST proceedings are active, your application will be dismissed without an answer on the tax rate. This results in lost application fees and delayed resolution of your tax liability. You may also face penalties if you pay tax based on your own assumptions while assessments remain open.
The terms explained
- Advance Ruling
- An official written decision given by tax authorities to a business about the tax rate or law applicable to its specific transaction.
- Provisional Assessment
- A temporary tax assessment allowed when the exact final tax rate or value of imported goods cannot be decided immediately.
- Integrated Goods and Services Tax (IGST)
- The GST tax collected on imports into India and on transactions between two different states.
The ruling in detail
Authority for Advance Ruling
MOSAIC INDIA PVT. LTD.
NO. GST-ARA- 32/2017-18/B-40, dated 25.05.2018 · Maharashtra
Questions before the authority
- Q. 1. Whether the subject goods proposed to be supplied by the applicant merits classification under the Heading 2309, (Sr. No. 102) in terms of Notification No. 2/2017 – Central Tax (Rate) dated 28.06.2017 and is therefore exempt from the levy of Central Goods and Services Tax (CGST) under the Central Goods and Services Tax Act, 2017 (CGST Act)?
- Q. 2. Whether the subject goods proposed to be supplied by the applicant merits classification under the Heading 2309, (Sr. No. 102) in terms of Notification No. 2/2017 – Integrated Tax (Rate) dated 28.06.2017 and is therefore exempt from the levy of Integrated Goods and Services Tax (IGST) under the Integrated Goods and Services Tax Act, 2017 (IGST Act)?
- Q. 3. Whether the subject goods proposed to be supplied by the applicant merits classification under the Heading 2309, (Sr. No. 102) in terms of Notification No. 2/2017 – State Tax (Rate) dated 29.06.2017 and is therefore exempt from the levy of Maharashtra Goods and Services Tax (SGST) under the Maharashtra Goods and Services Tax Act, 2017 (MGST Act)?
- Q. 4. Further, if the Subject product is not classifiable under any of the aforesaid entries (Heading 2309) what would be the appropriate classification for the same and at what tax rate would CGST, SGST and IGST be imposable on its supply?
Facts
The applicant imports BIOFOS Monocalcium Phosphate from the USA for supply to wholesalers or manufacturers as an animal and poultry feed supplement. It filed an application seeking advance ruling on whether the product qualifies for exemption under Tariff Heading 2309 or its appropriate classification and tax rate. During the personal hearing, the applicant admitted that its import consignments were currently under provisional assessment under the Customs Act regarding classification and IGST applicability.
Ruling
The Authority **rejected the application** at the admission stage under Section 98(2) of the CGST Act, 2017. The ruling was refused because proceedings regarding the classification of the goods were already pending under provisional customs assessments.
Reasoning
Under the first proviso to Section 98(2) of the CGST Act, 2017, the Authority shall not admit an application where the question raised is already pending or decided in any proceedings in the case of an applicant under any provisions of the Act. The applicant admitted that post-GST implementation, its import consignments were being **provisionally assessed under the Customs Act** for classification and applicability of Customs duty and IGST. Consequently, the application was barred by the proviso to Section 98(2) and could not be entertained.
Provisions relied on
- Section 98(2) of the Central Goods and Services Tax Act, 2017
- Section 98(2) of the Maharashtra Goods and Services Tax Act, 2017
- Notification No. 2/2017 - Central Tax (Rate) dated 28.06.2017
- Notification No. 2/2017 - Integrated Tax (Rate) dated 28.06.2017
- Notification No. 2/2017 - State Tax (Rate) dated 29.06.2017
For the practitioner
This order confirms that **provisional assessment under the Customs Act** involving IGST levy constitutes a pending proceeding, creating a statutory bar to seeking an advance ruling under Section 98(2) of the CGST Act. Tax practitioners must verify that no parallel provisional assessments or disputes exist on identical classification issues before filing for an advance ruling.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/mah_aar_32_2017-18_b-40_mosaic_india_pvt_ltd.pdf
Legibility of the scan, as read: high.
Prepared 18-10-2026.
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