AAR Tamil Nadu Dismisses E-Way Bill Application by Grayeye IT Systems — Procedural Queries Fall Beyond Jurisdiction of Advance Ruling
Background and Overview
The Authority for Advance Ruling (AAR), Tamil Nadu, recently ruled on an application submitted by M/s. Grayeye IT Systems Pvt. Ltd., a Chennai-based company registered under GST with GSTIN: 33AAGCG2959R1ZY. The company is primarily engaged in OEM (Original Equipment Manufacturers) activities, system integration, networking, and supply of IT hardware items. Operating largely through Government e-Marketplace (GeM) contracts for various Central and State Government departments, the assessee frequently deals with multi-state transactions where goods move directly from one state to another without entering Tamil Nadu, the state where the company is registered.
Seeking clarity on several procedural dimensions of E-way bill generation, invoice issuance, and place of supply, the assessee filed an application for advance ruling before the AAR Tamil Nadu in Form GST ARA-01, dated 24.10.2025. A fee of Rs. 5,000/- each was deposited under sub-rule (1) of Rule 104 of the CGST Rules, 2017 and SGST Rules, 2017.
The outcome, however, was not a substantive ruling on any of the questions posed. Instead, the AAR declined to admit the application altogether, concluding that the queries raised were purely procedural in nature and did not fall within the categories enumerated under Section 97(2) of the CGST Act, 2017.
The Three Scenarios Presented by the Assessee
The assessee outlined three distinct transactional situations that prompted the application:
Scenario 1: Bill-to/Ship-to Across Different States — Supplier, Customer, and Applicant in Three Separate Locations
In this scenario, the assessee handles GeM contracts where:
- The supplier is located in New Delhi
- The end customer (a government institution) is located in Jammu & Kashmir
- The assessee's registered office is in Chennai, Tamil Nadu
The supplier at New Delhi dispatches goods directly to the customer in Jammu & Kashmir on behalf of the assessee. The supplier raises an invoice on the assessee using the Bill-to/Ship-to concept, and the assessee in turn issues an outward invoice to the Jammu & Kashmir customer. Crucially, the goods never physically pass through Tamil Nadu.
The assessee sought guidance on how E-way bills should be handled in such a triangular movement scenario.
Scenario 2: Supplier and Customer in the Same State, Assessee in a Different State — IGST vs. CGST/SGST Dispute
Here:
- The supplier is located at Secunderabad, Telangana
- The customer is located at Hyderabad, Telangana (same state as the supplier)
- The assessee is registered in Chennai, Tamil Nadu
The supplier dispatches goods directly to the assessee's customer in Hyderabad under the Bill-to/Ship-to arrangement and raises an invoice on the assessee in Chennai. However, the supplier charges CGST and SGST rather than IGST. The assessee contended that as per Rule 11 of the Place of Supply provisions, IGST ought to be applicable in this situation since the "bill to" party (the assessee) is located in a different state.
The assessee sought clarification on the appropriate E-way bill procedure applicable in such cases, along with guidance on the correct levy — whether IGST or CGST/SGST — and the proper place of supply determination.