Budget Alert 2026: Interim Mechanism for GST Advance Rulings
The Finance Bill, 2026 has introduced a strategic amendment to the CGST Act, 2017, aimed at resolving the long-standing delay in the operationalization of the National Appellate Authority for Advance Ruling (NAAAR).
Key Proposed Amendment: Section 101A
To ensure that taxpayers aren’t left in limbo due to conflicting State-level rulings, the Bill proposes the following:
• New Sub-section (1A): This empowers the Government to notify an “existing authority” (which specifically includes a Tribunal) to act as the National Appellate Authority.
• Interim Power: Until the NAAAR is formally constituted, this notified authority will hear appeals under Section 101B regarding conflicting advance rulings from different States or Union Territories.
• Legal Standing: All references to the “National Appellate Authority” in the Act will be treated as references to this newly notified interim authority.
Why This Matters
Previously, if two different State Appellate Authorities (AAAR) gave conflicting rulings on the same issue for a taxpayer with multiple GST registrations, there was no active central body to resolve the dispute.
Streamlined Appeals: This amendment ensures that an appellate forum is available immediately, providing much-needed certainty and reducing the risk of divergent tax treatments across different states.
