Purpose of advance ruling is to minimise disputes by providing clarity on confusing matters so it tries to avoid litigation in future. If you see name i.e. advance ruling, this name itself signifies that ruling in advance or decision in advance.

You must be aware that few items (petroleum and petroleum products (like petrol, HSD etc. and alcoholic liquor for human consumption) are still liable to State VAT and petroleum and petroleum products, tobacco and tobacco products are liable for Central Excise duty too. Tobacco and tobacco products are only items where GST and Central excise duty both are levied. Therefore Central excise laws and State VAT laws are still applicable for few items but I have used past tense for VAT laws and Central excise laws while referring any provision of the relevant law.

ADVANCE RULING IN CENTRAL TAX LAWS (DIRECT OR INDIRECT TAX LAW)

For the first time Justice Wanchoo committee recommended for Advance ruling (though this committee also noted that in case of certain states, sales tax laws of such state provided for Determination of Disputed Question (DDQ) i.e. akin to advance ruling concept)

For the first in central taxation laws, advance ruling concept was brought in income tax by Finance Act, 1993 (at present refer section 245N to 245V). In 1999 advance ruling concept introduced in central excise and custom, later on in 2003 this concept also extended to service tax.

ADVANCE RULING IN STATE VAT LAWS

In State VAT laws advance ruling is generally referred as Determination of Disputed Question (DDQ).

FOR EXAMPLE:

Section 84 of Delhi VAT Act, 2004 had provision for application for determination of a determinable question i.e. a kind of advance ruling concept, and this application could have been made for a proposed transaction, a transaction that is being undertaken or a transaction already undertaken.

Section 60 of Karnataka VAT Act, 2003, had provision for clarification and advance ruling.

Section 55 of Maharashtra VAT Act, 2002, had provision for advance ruling.

ADVANCE RULING CONCEPT INTERNATIONALLY

Advance ruling concept is prevalent in many countries like USA, Singapore, UK etc.

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Disclaimer – Author has exercised utmost care while writing this article, but still this article may contain some error or mistake and no part of this article/writing should be construed or considered as any advice or consultancy whether professional or otherwise.

Author may be reached at [email protected]

Author Bio

Qualification: CA in Practice
Company: KARACT FILINGS
Location: New Delhi, Delhi, India
Member Since: 26 Jan 2018 | Total Posts: 21
Chartered Accountant having more than 6.5 years of very rich experience in the field of GST, Custom, Income-tax, Company law, LLP law, Corporate law, pre-regime GST law (VAT, Service tax,, Excise law etc.), FCRA, FEMA, Accounting, Financial reporting, Ind-AS, IFRS, stock market etc. View Full Profile

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