Tirumala Milk Products, a Bangalore-based company that sold flavoured milk in Karnataka failed to convince the Appellate bench of the GST Authority for Advance Rulings, that dismissal of its earlier application by the AAR was not maintainable.
The company had sought a ruling, from the GST Authority for Advance Rulings (AAR), Karnataka bench, on whether flavoured milk would attract Goods and Services Tax (GST) at 5%. However, as the Directorate of GST Intelligence (DGSTI), Bangalore Zonal Unit had already initiated an investigation, its application seeking an advance ruling was rejected.
Before the AAAR, the company contended that for the AAR to reject an application, the issue in respect of which the ruling is sought, must be pending before the jurisdictional officer. In its case, the investigation was initiated by another authority.
However, the AAAR held that the use of the phrase ‘any proceeding’ includes proceedings pending either before the jurisdictional officer or before any investigative agency such as the DGSTI. In this case, the DGSTI’s investigation related primarily to the classification and rate of tax applicable on flavoured milk. Thus, AAR had rightly rejected the application.