In re M/s. Murali Pharmacy (Prop: Narayanasamy Thangaiah Rajendran Balasubramanian) (GST AAR Tamilnadu)
The Authority for Advance Ruling, Tamil Nadu, considered an application filed by a registered proprietorship pharmacy engaged in the supply of medicines, life-saving drugs, and medical equipment, including inter-State procurements. The applicant was registered under GST and had been regularly filing returns and paying tax. During FY 2018–19, the applicant’s turnover exceeded ₹20 lakh, and GST was duly collected and paid. Subsequently, Notification No. 10/2019-CT dated 07.03.2019 increased the registration threshold for suppliers of goods from ₹20 lakh to ₹40 lakh with effect from 01.04.2019. The applicant’s turnover for FY 2019–20 was below ₹40 lakh, and the applicant claimed that, although registration was continued, GST was not collected from customers on the basis of the enhanced threshold exemption.
Relying on the notification and various provisions of the CGST Act, the applicant contended that no tax was payable for the periods 2019–20 to 2020–21 as the turnover remained below ₹40 lakh, and sought clarification on whether the exemption applied to existing registrants as well, or only to new registrants. These issues formed the subject matter of the advance ruling application.
Before examining the merits, the Authority considered the admissibility of the application under Section 98(2) of the CGST Act, which bars admission of an advance ruling application where the question raised is already pending or decided in any proceedings under the Act. The Authority noted that scrutiny proceedings had already been initiated against the applicant prior to filing the advance ruling application. A notice in Form GST ASMT-10 had been issued on 24.02.2023 seeking explanation for discrepancies identified during scrutiny of returns for the period 2019–20 to 2021–22. The applicant thereafter filed the advance ruling application online on 27.04.2023.
