The concept of a National Appellate Authority for Advance Ruling (NAAAR) was introduced to ensure uniformity in the interpretation of GST law across India. Sections 101A, 101B and 101C were inserted into the CGST Act through Section 105 of the Finance (No. 2) Act, 2019.
It is pertinent to note that while many other changes introduced through the amendment Act were notified and brought into force with effect from 01.01.2020, some provisions were notified through Notification 1/2020- Central tax dt 1.1.2020 but the provisions relating to the National Appellate Authority, i.e., Sections 101A, 101B and 101C, have not been notified till date.
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Legislative Intent Behind NAAAR
These provisions were intended to address situations where conflicting advance rulings are given by Appellate Authorities of different States on the same issue involving distinct persons.
The absence of a centralised appellate mechanism often leads to uncertainty and inconsistency in tax positions across jurisdictions.
Scheme of Sections 101A, 101B and 101C
Section 101A provides for the constitution of the National Appellate Authority as a central forum to resolve contradictory rulings and bring consistency in tax administration.
Section 101B lays down the procedure for filing appeals before this Authority in cases where two or more Appellate Authorities have given divergent rulings on the same question.
Section 101C provides for the manner of passing orders and communication thereof.
Timelines and Procedural Discipline
Section 101B prescribes specific timelines for filing appeals: The applicant is required to file an appeal within 30 days. The department is granted 90 days. A further condonable period of 30 days is available to both.
Section 101C further provides that orders are to be passed within 90 days, as far as possible.
These provisions reflect a balanced approach between procedural discipline and substantive justice.
The Core Issue – Non-Notification of Provisions
Despite being enacted, Sections 101A, 101B and 101C have not been notified till date, based on the research carried out and subject to any subsequent developments, and consequently, the National Appellate Authority has neither been constituted nor made functional.
This has resulted in a clear institutional vacuum, particularly in cases involving conflicting advance rulings across States.
Legislative Response – Insertion of Section 101A(1A)
To address this practical gap, the Finance Act, 2026, through Section 156, has inserted sub-section (1A) in Section 101A with effect from 01.04.2026.
Notably, this amendment has been brought into force even though the parent provisions, namely Sections 101A, 101B and 101C, continue to remain unnotified till date.
This provision empowers the Government, on the recommendations of the GST Council, to designate any existing authority, including a Tribunal, to act as the National Appellate Authority. Amendments also provide that sub-sections (2) to (13) of Section 101A shall not apply in such cases.
Treat references to NAAAR as references to such notified authority.
This reflects a clear legislative intent to operationalise the appellate mechanism, at least on an interim basis.
The Legal Paradox – Can 101A(1A) operate Independently?
A pertinent legal issue arises as to whether Section 101A(1A) can be effectively implemented when the parent provision itself is not notified.
While the legislature is competent to enact and enforce such an amendment, its practical enforceability remains dependent on the notification and operationalisation of Sections 101A, 101B and 101C, which, based on the research carried out and subject to any subsequent developments, continue to remain unnotified.
Thus, although sub-section (1A) is in force from 01.04.2026, its real utility may remain limited in the absence of a functional statutory framework.
Illustrative Example
Consider a company operating in multiple States seeking advance rulings on the taxability of a particular service:
The AAAR in Maharashtra holds the service to be taxable.
The AAAR in Karnataka holds the same service to be exempt.
This creates a direct conflict affecting the same taxpayer (or distinct persons under GST law).
In such a scenario, an appeal would lie before the National Appellate Authority and the tax payer is required to file appeal within 30 days of the State Appellate Authority’s order under Section 101B.
The department may file within 90 days, with an additional condonable period of 30 days.
The order is to be passed under Section 101C.
However, in the absence of notification of Sections 101A, 101B and 101C of the CGST Act, 2017, such disputes lack a functional appellate forum.
Even though Section 101A(1A) enables the Government to designate an alternative authority (such as the Principal Bench of GSTAT, New Delhi), its effective implementation may still face practical and legal limitations.
Conclusion
The insertion of Section 101A(1A) represents a pragmatic legislative attempt to address a long-standing gap in the GST advance ruling appellate framework.
However, the continued non-notification of Sections 101A, 101B and 101C , creates a unique legal paradox.
Until these foundational provisions are brought into force, the amendment to Section 101A may not be effective underscoring a situation where the law has been enacted and even amended, but not fully operationalised in practice.
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