Advance

Rulings under
GST
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 Tax Disputes inevitable.

 Two approaches- Dispute Resolution & Dispute Prevention.

 Advance ruling is a system of Dispute Prevention.

 Advantages are;

*Certainty of tax position.

*Planning activities accordingly.
*Avoid Litigation
*Attract FDI

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 Meaning of the term “Advance
Ruling”
Section 95(a) of the CGST Act
Advance ruling” means a written decision provided by the Authority or, as
the case may be, the Appellate Authority to an applicant on matters or on
questions specified in Section 97(2) or Section 100(1) of the CGST Act, as
the case may be, in relation to the supply of goods or services or both
proposed to be undertaken or being undertaken by the applicant.

It is also worth highlighting here that under the erstwhile Service Tax Law,
advance ruling could be sought only for a service proposed to be provided
by the applicant

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 “Advance Ruling” – Meaning
& its Advantages
 Advance Ruling” means a decision provided by the Authority or the Appellate
Authority to an applicant on matters or on questions specified in sub-section
(2) of section 97 or sub-section (1) of section 100, in relation to the supply of
goods or services or both being undertaken or proposed to be undertaken
by the applicant.

Binding on both Greater Tax Reduced

Assessee and Certainty Litigation
Government

Inexpensive Expeditious Greater

Transparenc
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y
 Constitution of the Authority and
Appellate Authority
Authority for Advance Ruling Appellate Authority of Advance Ruling
One member from the officers of Central Tax Chief Commissioner of Central Tax as designated by the
– To be appointed by the Central Government Board

One member from the officers of Union Territory Tax/ State Commissioner of Union Territory Tax/ State Tax having
Tax – To be appointed by the Central Government/State jurisdiction over the Applicant
Government

 Both the Authority for Advance Ruling & the Appellate Authority for Advance Ruling are constituted under
the respective State/Union Territory Act and not the Central Act.

 This means that the ruling given by the AAR & AAAR will be applicable only within the jurisdiction of the
concerned state or union territory.

 Therefore, questions on determination of place of supply cannot be raised with the AAR or AAAR.

 The respective State Governments by notifications to constitute the Authority of Advance Ruling
and Appellate Authority of Advance Ruling.

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 Questions on which Advance
Ruling can be sought
 Classification of any goods and/ or services

 Applicability of any notification

 Determination of time and value of supply of goods and/ or services

 Admissibility of input tax credit of tax paid or deemed to have been paid

 Determination of the liability to pay tax on any goods or services or both

 Whether applicant is required to be registered

 Whether a transaction amounts to supply of goods and/ or services

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 Questions on which Advance
Ruling can be sought
 Can Advance ruling be sought on issues relating to place of supply?
 How many issues can be asked in a single AAR?
 Sutherland Mortgage Services INC Vs Principal Commissioner (Kerala
High Court)
 Can recipient apply for AAR? What matters

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 Other notable aspects about
advance ruling
 No advance ruling in case the issue is already pending or is decided (in applicant’s case)

 Both Authority and Appellate Authority shall grant hearing to the applicant while deciding
the application.

 Members of Authority differ in opinion – reference to be made to Appellate Authority.

Members of Appellate Authority differ - no advance ruling can be obtained.

 Time period for both Authority and Appellate Authority to pronounce the ruling – ninety
days from date of receipt of application/appeal.

 Appeal can be filed within 30 days from the communication of the ruling which may be
further extended by 30 days on sufficient cause being shown.

 Both Authority and Appellate Authorityempowered to rectify

an error, in the order, apparent on the face of record, within six months
from the date of the order.

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 Other notable aspects about
advance ruling
 Ruling pronounced by the Authority/Appellate Authority shall be binding only on the Applicant and
on the concerned officer.

 Ruling is not binding is the same is obtainedby fraud or suppression of facts or

misrepresentation of facts.

Writ Petitions have been filed in the Gujarat/Rajashthan/Calcultta High Courts challenging that the composition of AAR
and AAAR amounts to “Coram non-judice” due to the absence of judicial member. The matters are pending.

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 Disadvantages in the concept of
advance ruling
 Applicant will have to obtain a ruling in each State it has its business operations. What if conflicting?

 Presence of Appellate Authority makes the complete process lengthier and may lead to a dead-end.

 In case of difference in opinion the whole process becomes redundant

 Issues relating to place of supply cannot be dealt-with by the Authority / Appellate Authority.

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 Comparison in the provisions of
advance ruling – Pre &Post GST
Particulars Pre – GST regime GST regime
Certainty of Tax Position Distinct Advance Ruling mechanism Orders of Authority & Appellate
for Central Tax Laws and State Tax Authority applicable only within the
Laws – thus, more conclusive position jurisdiction of the concerned state –
regarding the law Objective of uniformity of tax position
continues to be a dream
Expeditious Disposal No Appellate Authority – under the Provisions for time bound disposal
erstwhile regime. provided – however, our experience in the
past do not allow us to be optimistic on this
However, despite provisions for time count.
bound disposal – Authority had
often been unable to decide timely, Provision of appeal means no immediate
for reasons such as vacancy of finality of the issue as is being envisaged.
members, etc.
No judicial member in Authority or The Bench included a retired High Authority/Appellate Authority comprise
Appellate Authority Court/ Supreme Court judge – of Revenue officers – No judicial
ensuring the application of a judicial member – Possibility of a revenue bias
mind in deciding the matter cannot be ruled out.

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 Procedure of Receipt of
Application– Sec 98
AAR (Each State)
1 CGST + 1 SGST
Member Member Shall send copy, 2
1
Prescribed may call records
form and fees 3
w.r.t.
Accept
specified 7
or Reject
questions
only.
Applicant Prescribed Officer
Reject after
opportunity of
Hearing

Copy

* Not to admit if already before / decided by any Adjudicating or Appellate Authority.

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 Procedure for Advance ruling –
Sec 98
Application
admitted
AAR
3
1 If members differs,
refer to

Opportunity Appellate
of Hearing Authority of
1 Advance
Ruling

2 Prescribed
Applicant
Advance ruling Officer /
on Question in Jurisdictional
Application CGST / SGST
within 90days Officer

Copy
No application shall be admitted if the same is already pending or decided in any proceedings under any
provisions of GST
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 Practical Aspects for
Obtaining Advance Ruling
Circular no 25/25/2017 dtd 21.12.2017 regarding manual filling.

S. No. Particulars Details Source

1 Prescribed form and GST ARA-01 to be filed online on GST Rule 104 of the CGST
Mode of filing Common Portal Rules , 2017

2 Amount of fee to be Rs. 5,000/- under the CGST Rules, 2017.

paid Further, Rs. 5,000/- shall be paid under
the SGST Rules, 2017. Consequently,
effective fee shall be Rs. 10,000/-

3 Mode of payment of Internet banking or credit/debit cards or Section 49 of the CGST

fee NEFT or RTGS Act

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 Appellate Authority for Advance ruling
– Sec 100 & 101
AAR/ Aggrieved
Applicant
Within 30 days of Fees of Rs.
AAR ruling * 1
10000
AAAR
Designated Chief Commissioner 1
Commissioner
Central Tax +
SGST/UGST
Within 90 days 2 Opportunity of Being
Heard
Advance Ruling
confirmed or
* Period may modified
further be Or
extended by 30 Decide no ruling can
days. be issued
-Applicant
3
-CGST / SGST / UTGST
Officer
Copy to -AAR

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 Appeal to and Order of Appellate
Authority – Sec 100 and101
AAR

Ruling

-within 30 days
of
Prescribed Officer
Applicant Communication
or
of Ruling*
CGST/SGST
-in Prescribed
Officer
form with
prescribed
AAAR fees

Within 90 days
Hearing +
Decision
O
R
*Note: Appellate Authority
may allow further period of 30
days
Decide no ruling
can be issued
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 Practical Aspects Relating to Appeal
to the Appellate Authority for
Advance Ruling
S. No. Particulars Details Source
1 Prescribed form for filing an appeal GST ARA-02 to be filed online on Rule 106(1) of the CGST
to the Appellate Authority by an GST Common Portal Rules, 2017
applicant
2 Amount of fee to be paid for filing Rs.10,000/- to be paid under CGST
an appeal Rules, 2017. Further, Rs. 10,000 is to
paid under SGST Rules, 2017. Thus,
effectively fee of Rs. 20,000/- is to be
paid.

3 Mode of payment of fee Internet banking or credit/debit cards Section 49 of the CGST
or NEFT or RTGS Act, 2017

4. Prescribed form for filling an appeal FORM ARA-03 to be filled on GST Rule 106(2) of the CGST
to Appellate Authority by an officer portal with no fee. Rules, 2017
[Departmental Appeal]

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 Rectification of Advance
ruling – Sec 102
AAR or AAAR may rectify the ruling brought to its notice

 For mistake apparent from record.

 Either on own motion or if brought to notice by prescribed/
jurisdictional CGST/ SGST/ UTGST officer or applicant
 Opportunity of being heard if prejudicial to Applicant/
Appellant

Rectify mistake apparent from record within 6 months of

date of order

Note:- Not to amend substantive part of the order

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 Applicability of Advance
ruling – Sec 103
Advance
Ruling
Binding on

Applicant Jurisdiction
seeking AR al tax
as per Authority
section
97(2) UNLESS

Law, Facts, Circumstances have

changed

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 Ruling void ab initio –

Sec 104
If AAR / AAAR finds ruling obtained by the applicant
/appellant by fraud / misrepresentation / suppression of facts.

 By order declare advance ruling as void-ab-initio, after giving

an opportunity of being heard

Note:- All provisions of the Act shall apply after excluding

period in between date of ruling and this order

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 Power / Procedure of AAR/
AAAR– Sec 105 and 106
 Deemed to be civil court;

 Proceedings treated as judicial proceedings;

 Power to enforce attendance, examining on oath, issuing

commission, compelling production of books / records;

 Power to regulate its own procedure.

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 Thank You

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