Advance Rulings Determine GST Liability and Mandate Reimbursement Despite Conflicting Departmental Clarifications

The Petitioner was awarded a contract to supply frozen meat to the Indian Army for the fiscal year 2019-20

The Petitioner deposited ₹18,21,339/- towards GST on these supplies; however, the Army department withheld reimbursement of the GST amount

The Respondents relied on clarifications dated 25.04.2019 and 10.06.2019, which asserted that the Petitioner’s products were exempt from GST under Notification No. 2/2017-Central Tax (Rate)

Contrastingly, the Rajasthan Authority for Advance Ruling (RAAR) and the Rajasthan Appellate Authority of Advance Ruling (RAAAR) had ruled in 2019 that the Petitioner’s goods were branded and sold in "unit containers," thereby attracting a 5% GST rate and disqualifying them from the Entry 9 exemption of the 2017 Notification

The Petitioner sought a writ to quash the restrictive clarifications and a direction for reimbursement

1. Whether the supply of frozen meat by the Petitioner is exempt from GST under Notification No. 2/2017-Central Tax (Rate) or attracts a 5% tax rate

2. Whether the Petitioner is entitled to reimbursement from the Respondents for the GST paid pursuant to the advance rulings

The Court applied Section 103 of the Central Goods and Services Tax (CGST) Act, 2017, which mandates that an advance ruling is binding on the applicant and the concerned officers

It further considered Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 regarding GST exemptions for specific goods

The Court also relied on the legal finality of the rulings delivered by the Rajasthan Authority for Advance Ruling (RAAR) and the Rajasthan Appellate Authority of Advance Ruling (RAAAR), which determined the classification of "unit container" supplies

The Court noted that the primary justification for the Respondents' refusal to reimburse GST was the alleged exemption under the 2017 Notification

However, the RAAR and RAAAR specifically addressed this classification, holding that the Petitioner’s products were branded and supplied in unit containers, thus attracting 5% GST and excluding them from the Entry 9 exemption

Under Section 103 of the CGST Act, these rulings were binding upon the Petitioner, necessitating the deposit of the tax

Since the liability to pay GST was conclusively determined by the competent tax authorities, the Court found the Respondents’ reliance on internal clarifications to deny reimbursement to be unsustainable

Consequently, because the exemption was not applicable, the Petitioner was legally entitled to the reimbursement of the GST paid to the treasury

The Respondents were directed to process the reimbursement within three months from the receipt of the order

If the payment is delayed beyond this period, the Petitioner shall be entitled to interest at the rate of 6% per annum