GST Advance Ruling Inadmissible During Pending Investigations
The Authority for Advance Ruling rejected an application because an investigation into the same tax issue was already underway.
- Ruling
- Advance Ruling No.17/ARA/2023 Dated: 19.06.2023
- 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
- The Tamil Nadu Nurses and Midwives Council sought a GST ruling on fees.
- The Authority rejected the request without reviewing the tax merits.
- An active investigation by the DGGI barred the application.
- Section 98(2) of the CGST Act prohibits rulings on pending issues.
In short
The Tamil Nadu Nurses and Midwives Council asked the Authority for Advance Ruling (AAR) whether the fees they collect are subject to Goods and Services Tax (GST). The Authority did not answer this question because a tax investigation was already happening.
What has changed
How it worked before
Businesses often assumed that they could seek a formal opinion from the AAR even if tax officers were already looking into their records.
What has changed
The Authority clarified that if an investigation or proceeding is already pending, they cannot provide a ruling. This means you cannot use the advance ruling process to bypass or settle an ongoing tax audit or inquiry.
Who this affects
Any business or organization currently facing a tax investigation or inquiry from GST authorities.
An example
Imagine a private training institute that is currently being audited by the GST department regarding their course fees. If they apply for an advance ruling to confirm if their fees are tax-exempt, the Authority will reject the application. The institute must first resolve the ongoing audit before they can seek a new ruling on that topic.
What you should do
Check if your business is under any active investigation before applying for a ruling. Remember that an advance ruling only binds the specific business that asked and its own tax office; it is not a general law for everyone else.
If you do nothing
If you apply for a ruling while an investigation is pending, your application will be rejected and you will lose the filing fees. Furthermore, the tax department will continue their investigation, and you will have gained no legal clarity from the AAR process.
The terms explained
- Advance Ruling
- A formal decision provided by tax authorities to clarify how GST applies to a specific business transaction.
- DGGI
- The Directorate General of GST Intelligence, which is the wing of the government responsible for investigating tax evasion.
- Inadmissible
- When a request or application is not accepted for consideration by an authority because it does not meet the required rules.
The ruling in detail
Authority for Advance Ruling
Tamil Nadu Nurses and Midwives Council
Advance Ruling No.17/ARA/2023 Dated: 19.06.2023 · Tamil Nadu
Questions before the authority
- Whether GST is applicable on various fees collected by TN Nurses and Midwives Council a Government Authority?
Facts
The applicant is a statutory body constituted under the Tamil Nadu Nurses and Midwives Act, 1926, to regulate the nursing profession and maintain a register of nursing professionals. They collect various fees from institutions and students for services such as registration, recognition, and inspection. The applicant sought an advance ruling on the taxability of these fees under the GST Act.
Ruling
| Question | What the authority ruled |
|---|---|
| Applicability of GST on fees collected | Application rejected Rejected due to pending proceedings/investigation by DGGI |
The Authority for Advance Ruling rejected the application without deciding the merits of the taxability question. It held that because an investigation by the DGGI was already pending against the applicant regarding the same subject matter, the application is barred under the first proviso to Section 98(2) of the CGST Act.
Reasoning
The Authority examined the records and found that the DGGI, Chennai Zonal Unit, had initiated an investigation and issued an incident report determining tax liability against the applicant prior to the filing of the application. Under the first proviso to Section 98(2) of the CGST Act, the Authority is prohibited from admitting an application where the question raised is already pending or decided in any proceedings. The Authority rejected the applicant's argument that 'proceedings' should be interpreted narrowly to exclude investigations or summons under Section 70. Consequently, the application was deemed inadmissible.
Provisions relied on
- Section 98(2) of the CGST Act
- Section 70 of the CGST Act
- Section 73 of the CGST Act
- Section 74 of the CGST Act
For the practitioner
This ruling serves as a procedural reminder that an **advance ruling application is inadmissible** if any investigation or proceedings are already pending against the applicant on the same issue. It clarifies that the term 'proceedings' in the context of Section 98(2) is broad and includes investigations initiated by authorities like the DGGI. Practitioners should ensure no active departmental inquiries exist before filing for an advance ruling to avoid summary rejection.
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/17_aar_2023tamilnadu_nurses.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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