AAR rejects Rice Exporter’s Application on Packaged Rice citing Ongoing GST Audits [Read Order]

The Authority for Advance Ruling (AAR), Andhra Pradesh Bench rejected an application seeking clarity on the GST liability for exports of pre-packaged and labelled rice. The order was dismissed on procedural grounds after it was found that the specific questions raised were already subject to ongoing audit and adjudication proceedings for previous financial years.

The application was filed by Olam Agri India Private Limited, a company engaged in supplying rice in pre-packaged and labelled bags of up to 25 kilograms. The company’s business involves exporting rice directly to foreign buyers and supplying it to merchant exporters in India who subsequently export the consignments.

The applicant sought an advance ruling on four questions, primarily asking whether GST is leviable on the export of such packaged rice and on supplies made to exporters under a ‘bill to ship to’ basis. They also questioned the tax rate applicable to rice procured at a concessional rate of 0.1% under specific notifications before being exported.

The AAR, however, declined to answer these questions. Upon reviewing remarks from the jurisdictional tax authority in Kakinada, it was revealed that the very same issues concerning the tax treatment of these exports had already been decided for the financial year 2020-21 and are currently under adjudication for the years 2021-22 and 2022-23. The State Jurisdictional Officer confirmed that the taxpayer’s refund claims for these periods are under comprehensive verification and audit.

Citing the first provision to Section 98(2) of the CGST/APGST Act, 2017, the AAR stated it cannot admit an application if the question raised is already pending or decided in any proceedings under the Act against the applicant. Since the matter was sub-judice in earlier periods, the authority found the present application liable for rejection.

The bench, comprising K. Ravi Sankar, Commissioner of State Tax, and B. Lakshmi Narayana, IRS, Additional Commissioner of Central Tax, unanimously issued the order rejecting the plea.

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