Advance Ruling Under GST Act

ADVANCE RULING – Section 97 to 104 of Central Goods & Services Tax Act, 2017.

Applicant: – Person registered or desired to be registered in the act.

Section 97 Application for Advance Ruling

Applicant sends the application in the form of GST ARA-01 along with the prescribe fees(Rs.5000) in the prescribed manner to Advance Ruling Authority in relation to the following matters:

1. Classification of goods or services or both;

2. Applicability of notification

3. Determination of time of supply and value of goods

4. Admissibility of ITC of tax paid or deemed to have been paid

5. Determination of liability to tax on goods or services or both

6. Registration requirement of an applicant.

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 relation to supply being undertaken or proposed to be undertaken.

Section 98 Procedure on receipt of application

ARA may reject or admit the application filed by the applicant as per section 97.

ARA sends copy of application to the concerned officer and may call for record related to applicant and should return the records as soon as possible to the concerned authority.

ARA should pronounce ruling within 90 days from the date of receipt of application.

Reasons for not admitting the application

If raised questions are pending or decided in any proceedings then ARA may reject the application filed.

Procedure for rejecting the application

ARA may give opportunity of being heard to the parties before rejecting the application and sends copy of order along with reasons for rejection to the applicant and the concerned officer.

If ARA members have different opinion in relation to matter mentioned in application then ARA state the points of difference and refer to AAAR (appellate authority) for final discussion.

Section 100 Appeal to Appellate Authority

Aggrieved Party:Party who is aggrieved by the ruling pronouncement of ARA.

i.e. applicant, concerned officer and jurisdiction officer.

Aggrieved party may appeal under this section to the appellate authority against the ruling pronounced by ARA within 30 days from the date of receipt of ruling in the form ARA – 02 along with the fees Rs. 10000.

If there is sufficient cause, condonation of delay is 30 days.

Section 101 Order of the Appellate authority

AAAR before passing the order may provide opportunity of being heard to the parties ie concerned officer and applicant and pass the order within 90 days from the date of receipt of application for appeal. The appellate order shall be communicated to the concerned parties.

If there is difference of opinion between the members of AAAR then no ruling can be pronounced against such matter.

Section 102 Rectification of Advance Ruling

AAR by its own motion; or

Upon receipt of application by AAR

from the Jurisdictional officer; or

from the applicant to AAR

may rectify the mistake apparent on the record

if application is received by the AAR within 6 months from the date of order.

If rectification results into increasing tax liability or decreasing input tax credit, opportunity of being heard must be given by AAR

Section 103 Binding effect of Advance Ruling

Ruling is binding on Applicant and Jurisdiction Officer (in case if he is applicant)

Ruling is binding on the parties unless there is a change in law/facts/circumstances on the basis of which the advance ruling has been pronounced and effect is binding prospectively.

Section 104 Advance Ruling to void in certain circumstances

If the authority of advance ruling find that advance ruling has been obtained by the applicant by suppression of facts or misrepresentation of facts then such ruling is declared void ab initio and before passing the order opportunity of being heard is provided to the applicant and jurisdiction officer. And applying the respective provisions of the Act as if advance ruling had not been pronounced to the party.

Copy of order is communicated to applicant and concerned officer.

SUMMARY

If applicant has doubts/problems w.r.t. classification, applicability of notifications, input tax credit, registration, liability of tax, time and value of supply or determination of supply of goods or services or both then he may apply for the advance ruling to advance ruling authority in form AAR 1 along with Fees of Rs 5000. for removing the doubts. ARA may accept or reject the application after calling the records from the concerned officer. ARA shall before reject the application give opportunity of being heard and reasons of rejecting the application to the party. There may be a case if matter is pending or decided in the proceeding then application related to such matter shall not be admitted by the ARA. If ARA accepts the application, ruling shall be pronounced by ARA within 90 days from the date of application.

If on any point opinion of members of ARA is differ, then ARA state point of difference and refer to AAAR for final discussion and ruling shall be pronounced by AAAR within 90 days. If on any point opinion of members of AAAR is differ then no ruling can be pronounced further.

If any party, is aggrieved by the pronouncement of ruling of AAR, may appeal to the AAAR within 30 days from the date of receipt of ruling (extension 30 days if sufficient cause of delay) in FORM AAR 2 along with Fees Rs 10000.

OBH is given to the parties before passing the order by AAAR. Order shall be passed within 90 days from the date of filing of appeal and appellate order shall be communicated to parties.

If there is any mistake apparent on record found by the AAR itself or brought to its notice by jurisdictional officer or applicant, application for rectification can be made within 6 months from the date of order.

If rectification results into increase in tax liability or reduction in input tax credit, OBH must be given by the AAR.

Once the advance ruling is pronounced, binding on the applicant and jurisdictional officer unless there is change in law/facts/circumstances on the basis of which advance ruling had been pronounced by the AAR.

Advance ruling is declared void ab initio if it is found by the AAR/AAAR that ruling has been obtained by misrepresentation of facts or suppression of facts by the party and provision of the Act will be applied as if advance ruling had not been pronounced. Before passing the order OBH shall be given to the party and order shall be communicated to the applicant and concerned officer.