When Members Differ: Sections 98(5) and 101(3)

Members Differ explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

The Authority has two members. Two members can disagree — and the Act handles that differently depending on which forum is deadlocked.

Section 98(5): where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question. Section 101(3): where the members of the Appellate Authority differ on any point referred in appeal or reference, "it shall be deemed that no advance ruling can be issued in respect of the question under the appeal or reference." A first-stage deadlock is resolved upward; a second-stage deadlock produces nothing.

Why deadlock is structural, not exceptional

Section 96 makes the Authority for Advance Ruling constituted under the State or Union territory GST Act the Authority for that State — and those Authorities are constituted with two members, one from the Centre and one from the State.

Rule 103: the Government shall appoint officers not below the rank of Joint Commissioner as members of the Authority.

Two members, drawn from two administrations, with no third member and no casting vote. A split is a structural possibility, not a rare accident. The same composition applies at the appellate level under s.99.

Section 98(5): the reference upward

What the members must do: state the point or points on which they differ, and make a reference to the Appellate Authority for hearing and decision.

What that produces: a matter before the Appellate Authority — not on appeal, but on reference.

Section 101(1) covers it expressly: the Appellate Authority may, after giving the parties to the appeal or reference an opportunity of being heard, pass such order as it thinks fit, confirming or modifying the ruling appealed against or referred to.

Section 101(2) gives the same ninety days for a reference as for an appeal, running from the date of the reference under s.98(5).

For the applicant, a reference is not a bad outcome. There is no appeal to file, no ₹10,000 fee under Rule 106(1), and no thirty-day deadline to meet. The matter moves up automatically, and the applicant is heard again.

What to do on receiving notice of a reference:

• read the stated points of difference — they define what the Appellate Authority will decide;
• prepare submissions addressed to those points, rather than restating the whole application;
• note that both views are on the record, so the favourable member's reasoning is available to be adopted and reinforced;
• attend the hearing — s.101(1) requires an opportunity of being heard to the parties to the reference.

Section 101(3): the deadlock that ends everything

"Where the members of the Appellate Authority differ on any point or points referred to in appeal or reference, it shall be deemed that no advance ruling can be issued in respect of the question under the appeal or reference."

Deemed that no advance ruling can be issued. Not "the ruling stands", not "the appeal is dismissed", not "the reference is returned". No ruling exists.

The consequences:

Nothing is binding. With no ruling, s.103 has nothing to operate on. Neither the applicant nor the officers are bound.

There is nothing to appeal. Section 100 provides an appeal against a ruling pronounced under s.98(4); where the appellate proceeding produces no ruling, there is no further ruling to challenge.

The fee is spent. ₹5,000 under Rule 104(1) and, where an appeal was filed, ₹10,000 under Rule 106(1) — with matching amounts under the State Act.

The time is spent. Ninety days at the first stage, thirty to appeal, ninety at the second — in principle, and often longer.

The question returns to where it started. The taxpayer must take a position and defend it in the ordinary way.

What a deadlock is actually worth

It is not entirely without value, and the record should be preserved.

The reasoning of both members is on the record. Where the taxpayer's position was accepted by one member of a statutory authority, that is a considered view supporting the position taken — and it is material when answering a later suppression allegation, because it shows the position was arguable and taken in good faith. The suppression allegation →

It demonstrates genuine difficulty. A question on which two members of a statutory authority, and then two more, could not agree is by definition not a case of a taxpayer taking a frivolous position.

Section 126 — the general disciplines relating to penalty — and the ordinary arguments against a fraud or suppression characterisation are both strengthened by that record.

So: keep the file. The application, the ruling with both views, the reference, the appellate order recording the difference, and the note recording what position the business then took and why.

After a deadlock

1. Take a position, documented, with the reasoning and the reference to both members' views.
2. Disclose it — in the return, in the annual return, and in the GSTR-9C reconciliation where relevant. Disclosure is what defeats a suppression allegation.
3. Consider a writ where the question is of continuing importance and the deadlock leaves a real commercial uncertainty — a court can decide the substantive question, which the AAAR could not.
4. Watch for a National Appellate Authority route where the question arises across States for distinct persons, under s.101B and the s.101A(1A) empowerment of an existing Authority. The empowered Tribunal as NAAAR →
5. Do not refile the same question. The first proviso to s.98(2) bars admission where the question was already decided in the applicant's proceedings, and an earlier application is treated as such.

Key takeaways

• Both the Authority and the Appellate Authority sit as two members — Centre and State — so a split is structural.
• Section 98(5): a first-stage difference produces a reference upward, with the points of difference stated.
• A reference costs the applicant no fee and carries no deadline — the matter moves automatically.
• Section 101(3): an appellate-stage difference means no advance ruling can be issued.
• Nothing then binds, nothing can be appealed, and the fees and time are spent.
• The record of both views is still valuable — it evidences a genuinely arguable position.

Read next

• Section 100: Appeal to the AAAR, ARA-02 and ARA-03
• Section 98(6): Ninety Days, and What Happens When It Slips
• What an Advance Ruling Cannot Decide
• The Suppression Allegation and How It Is Answered

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).