Consultants Cannot Seek Advance Ruling on Behalf of Their Manufacturer: Tamil Nadu AAR
The applicant, M/s AFS Group, said that their client manufactures and supplies 100% cotton yarn, attracting 5% GST. Their input goods and services, including packing materials, lubricants, and job work, attract higher tax rates between 12% and 18%, leading to the accumulation of Input Tax Credit (ITC).
The applicant sought an advance ruling before the Tamil Nadu Authority for Advance Ruling (AAR), asking the following question:
“Whether the applicant is eligible to claim refund under Section 54(3)(ii) of the CGST Act, 2017 for the accumulated Input Tax Credit arising due to inverted Duty Structure in respect of manufacture and outward supply of 100% Cotton Yarn (HSN 5205), where input goods and input services attract higher rate of GST compared to output supplies?”
The AAR noted that the applicant is a consultant, asking questions on behalf of their client, who is a manufacturer and supplier of the goods. Therefore, the question asked is not related to supplies made by the applicant, and it did not fall under the scope of Section 97(2) of the CGST/TNGST Acts, 2017. As a result, the AAR rejected the advance ruling application.
Case Citation: AFS Group (Tamil Nadu AAR); Advance Ruling No. 5/ARA/2026; 12/01/2026
