Advance Ruling | Section 95 to 99 | CGST ACT 2017 | Part I

Simplified GST Series –Chapter -18-Advance Ruling /Section 95-99/CGST ACT 2017 Part I

In part I of the Article author explains provisos of CGST ACT 2017 related to Section 95-Definitions  related to Advance Ruling, Section 96-Authority for advance ruling, Section 97- Application for advance ruling, Section 98- Procedure on receipt of application and Section 99- Appellate Authority for Advance Ruling.

Also Read- Advance Ruling | Section 100 to 106 | CGST ACT 2017 | Part II

Section 95-Definitions  related to Advance Ruling

This section defines the expressions ‘advance ruling’, ‘applicant’, ‘application’, ‘authority’ and ‘appellate authority’, for the purpose of this chapter.

1. “Advance ruling ‘’ – The expression ‘advance ruling’ would mean matters decided by the Authority for Advance Ruling (AAR, in short) and the Appellate Authority for Advance Ruling on the questions raised by the Applicant in respect of matters specified in Section 97(2) or Section 100(1).

2. Such matters or questions could be in relation to supply of goods and/or supply of services being undertaken or proposed to be undertaken by the applicant. Being undertaken refers to supply which is underway.

3. ‘’Applicant’’– The word “applicant” refers to any person already registered or one who desires to get registered under the Act. However, in case of an unregistered person it is mandatory to quote his PAN unless he is a non-resident.

4. No advance ruling can be sought on transactions already undertaken in the past.

5. ‘’Authority’’-  refers to the AAR constituted under section 96 of CGST Act, 2017 in each State or Union territory.

6. The expression “Appellate Authority” refers to the Appellate Authority for Advance Ruling constituted under section 99 in each State or Union territory. Therefore, every state/Union Territory will have its own Appellate Authority for Advance Ruling.

7. The expression “National Appellate Authority” means the National Appellate Authority for Advance Ruling referred to in section 101A.

Section 96-Authority for advance ruling

Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a 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.

Analysis- The AAR shall be located in each State/Union Territory constituted under the provisions of State Goods and Services Tax Act and Union Territory Goods and Services tax Act.

• The Government shall appoint officers not below the rank of Joint Commissioner as member of the Authority for Advance Ruling.
• As per Section 96 of the State GST Acts, the State Government may, on the recommendation of the Council, notify any AAR located in another State to act as the Authority for Advance Ruling for the State.
• The AAR shall consist of one member from amongst the officers of Central tax and one member from amongst the officers of State tax, to be appointed by the Central Government and the State Government respectively.
• As the AAR and the Appellate Authority have been instituted under the respective State / Union Territory Act and not the Central Act, the ruling given by the AAR and AAAR will be applicable only within the jurisdiction of the concerned state or union territory.
• The advance ruling is binding on the concerned officer or the jurisdictional officer only in respect of the applicant, the above mentioned officers may apply the law in a different manner with respect to another registered person under his jurisdiction.

Section 97- Application for advance ruling

(1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. 

(2) The question on which the advance ruling is sought under this Act shall be in respect of,

(a) Classification of any goods or services or both;

(b) Applicability of a notification issued under provisions of this Act;

(c) Determination of time and value of supply of goods or services or both;

(d) Admissibility of input tax credit of tax paid or deemed to have been paid;

(e) Determination of the liability to pay tax on any goods or services or both;

(f) whether applicant is required to be registered;

(g) 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.

Analysis- An applicant who seeks an advance ruling should make an application online in the prescribed FORM GST ARA-01 together with a fee of Rs. 5000/-stating the question on which such a ruling is sought.

• An applicant who seeks to file an appeal before the Appellate Authority for Advance Ruling shall apply online in FORM GST ARA-02 together with a fee of Rs. 10000.
• The application and all the relevant documents accompanying such application should be digitally signed through Digital Signature Certificate (DSC).
• It is advised that the questions or issues in respect of which an advance ruling is sought be simple, direct and specific.
• As regards an appeal against an advance ruling by the AAR filed by the concerned officer or the jurisdictional officer, the application shall be filed online in Form GST ARA-03 without any payment of fee.
• Matters relating to determination of place of supply are beyond the scope of matters to be decided by the Authority.
• No advance ruling can be sought on matters such as those relating to

a) Transitional credits specified in Chapter XX of the CGST Act, 2017

b) E-way bill requirements

c) Anti-Profiteering issues

d) Restraining officers from initiating an action/proceeding under the Act

Section 98- Procedure on receipt of application

Let us discuss it in simplified manner-

Receipt of Application-

• On receipt of an application in FORM GST ARA-01, the AAR shall forward a copy to the concerned officer and, if necessary, direct him to furnish the relevant records.
• Such records should be returned as soon as possible to the concerned officer. No specific time limit has been set out for submission of the said records to the AAR.
• The AAR may either accept or reject the application after considering the application, examining the records, hearing the applicant and the concerned officer or theirauthorised representatives. However no application shall be rejected without giving theapplicant an opportunity of being heard.
• Any application for advance ruling involving questions already pending or decided in any proceedings in the case of that applicant under any of the provisions of this Act shall not be admitted.
• Where the application is finally rejected, the reasons for such rejection shall be stated in the order.
• A copy of every order admitting or rejecting made shall be sent to the applicant and to the concerned officer

Pronouncement of advance ruling-

• Examine such further material as may be placed before it by the applicant or obtained by the AAR.
• Pronounce its advance ruling in writing on the question(s) specified in the application within 90 days from the date of receipt of application.

Reference to Appellate Authority

• Where the members of the AAR differ on any question on which the advance ruling is sought, they shall state the point(s) of difference and refer it to the Appellate Authority for advance ruling for final decision.
• The Appellate Authority to whom a reference is made is required to pronounce the ruling within ninety days of such reference.       

Submission of advance ruling pronounced:  A copy of the advance ruling pronounced by the concerned AAR / Appellate Authority, duly signed by the Members and certified, shall be sent to the applicant and to the concerned officer after pronouncement.

Section 99- Appellate Authority for Advance Ruling:

Subject to the provisions of this Chapter, for the purposes of this Act, the Appellate Authority for Advance Ruling constituted under the provisions of a State Goods and Services Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate Authority in respect of that State or Union territory.

Analysis- The appellate authority constituted in each State/UT shall be deemed to be the Appellate Authority in respect of that State/UT which will entertain appeals against any advance ruling that is passed by the AAR of that State/UT.

• Similar to Section 96 in respect of AAR, a State Government may, on the recommendations of the Council, notify any Appellate Authority located in another State/UT to act as the Appellate Authority for the State.

Remaining Sections related to Advance ruling will be discussed in next Article –Advance ruling -Part -2.

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