Article explains  What is advance ruling under GST, To whom the Advance Ruling under GST is applicable,  Matters/questions specified in Section 97(2) of CGST Act, 2017 on which Advance ruling can be sought,  Procedure for obtaining Advance Ruling and the time line under GST and Rectification of Mistakes in Advance Ruling under GST.

What is advance ruling under GST?

Section 95 of the CGST Act, 2017 provides ‘Advance ruling’ as 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.

The aim of the ruling is to provide certainty to the taxpayer with respect to his obligations under the GST and to avoid litigations.

To whom the Advance Ruling under GST is applicable?

An advance ruling pronounced by AAR be binding only on the applicant and on the concerned officer or the jurisdictional officer in respect of the applicant. This clearly means that an advance ruling is not applicable to similarly placed other taxable persons in the State. It is only limited to the person who has applied for an advance ruling.

Matters/questions specified in Section 97(2) of CGST Act, 2017 on which Advance ruling can be sought

1. classification of any goods or services or both;

2. applicability of a notification issued under the provisions of CGST Act;

3. determination of time and value of supply of goods or services or both;

4. admissibility of input tax credit of tax paid or deemed to have been paid;

5. determination of the liability to pay tax on any goods or services or both;

6. whether applicant is required to be registered;

7. whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.

In a single ruling the applicant may question on multiple matters stated above . For example, in a ruling the applicant may have a question on the applicability of a notification and determination of liability thereupon.

Application for advance ruling shall not be admitted in cases where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of CGST Act.

The Authority for advance ruling constituted under the provisions of State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory under the CGST Act, 2017 also. This would mean that the ruling given by the AAR will be applicable only within the jurisdiction of the concerned state or union territory. It is also for this reason that questions on determination of place of supply cannot be raised with the AAR.

Procedure for obtaining Advance Ruling and the time line under GST.

1. The applicant desirous of advance ruling shall make an application in FORM ARA 01# accompanied by a fee of 10,000 presently (CGST: Rs. 5,000 and SGST Rs. 5,000) (for OIDAR taxpayer IGST: Rs. 10,000).

# apart from the basic information like Name, Contact details the applicant is required to fill three ruling related fields being (i)  Question(s) on which advance ruling is required, (ii) Statement of relevant facts having a bearing on the question(s) raised and (iii) Statement containing the applicant’s interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s).

  • Process of applying online
  • Login to GST Portal
  • Go to Services>User Services>My Applications
  • Select Advance Ruling in dropdown and click on new application
  • Make a fee payment of Rs. 10,000 and then click on create application for advance ruling
  • Fill in the form (is in format of ARA 01) and in ‘details of advance ruling’ attach the signed copy* of ARA 01 along with any other relevant document necessary for the ruling.
  • File the form using DSC.
  • Download the acknowledgement of ARA.

* in the case of a company, by the Chief Executive Officer or the authorized signatory thereof.

2. The authority accepts or rejects the application by examining all the records and may even call the applicant or his authorised representatives for hearing in the matter.

3. After receipt of the application a written ruling is provided within 90 days of receipt.

Rectification of Mistakes in Advance Ruling under GST

The law gives power to AAR to amend their order to rectify any mistake apparent from the record within a period of six months from the date of the order. Such mistake may be noticed by the authority on its own accord or may be brought to its notice by the applicant or the prescribed or the jurisdictional CGST/SGST officer. If a rectification has the effect of enhancing the tax liability or reducing the quantum of input tax credit, the applicant must be heard before the order is passed.

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