Department of Sales Tax, Government of Maharashtra
25 Frequently Asked Questions (FAQ) regarding Advance Ruling
1. What is the Scheme of advance Ruling?
Earlier Provision: Section 55 of the MVAT Act, 2002 was provided for Advance Ruling. However, though in existence since 2005, it was not brought into force. New Provision: Now, existing Section 55 has been substituted by new section 55 and brought into force with effect from 15t May 2016. Section 56 of the MVAT Act, 2002 providing for determination of disputed question (DDQ) has been deleted with effect from 15t May, 2016.
2. Who can apply for an Advance Ruling?
An application for A.R. can be made by any person or dealer or registered dealer.
3. Which Forms are to be used in Advance Ruling and from where applications can be downloaded?
Ans.
1) Form 703 : Application for Advance Ruling to be made by the applicant
2) Form 703A : Report to be submitted by the concerned Nodal Joint Commissioner to the ARA
3) Form 703B : Intimation about Acceptance or Rejection of Application and hearing Notice
4) Form 703C : Notice to be issued by ARA for Rectification of mistake
5) Form 703D : Application for Rectification to ARA by Applicant
6) Form 703E : Notice for Review to be issued by the Commissioner of Sales Tax
The above Forms are made available on the Department’s website www.mahavat.qov.in and can be downloaded from Notification Section vide Notification No. VAT 1516/CR 64/Taxation-1dt 29th April 2016.
4. What is the composition of Advance Ruling Authority (ARA)?
The Advance Ruling Authority (A.R.A) has been constituted by the Commissioner of Sales Tax by issuing a Notification in the Official Gazette. The Additional Commissioner of Sales Tax is the Chairman and two members not below the rank of Joint Commissioners are the Members of A.R.A.
5. Where is the Authority located and who can be contacted for information/ guidance?
Ans. Office of the Advance Ruling Authority(ARA) is located at H Wing, 8th Floor, New Building, Vikrikar Bhavan, Sardar Balwant Singh Dodhi Marg, Mazgaon, Mumbai- 400 010.Tel.: 022-23760746/022-23760991, Email: advancerulinqmumbai@gmail.com , advancerulinqmumbai@mahavat.gov.in
6. On which questions an Advance Ruling can be sought?
Ans. The questions on which A.R. can be sought by a person are prescribed in the newly inserted rule 63 [GN No. VAT-1516/CR64/Tax 1 dated 29th Apr. 2016]. The questions, prescribed under rule 63 are as follows: ‑
(1) Whether such a person, society, club or association or any firm or any branch or department of any firm, is a dealer, or
(2) Whether such a person or dealer is required to be registered, or
(3) Whether any particular thing done to any goods amounts to or results in the manufacture of goods, within the meaning of that term, or
(4) Whether any transaction is a sale or purchase, or where it is a sale or purchase, the sale price or the purchase price, as the case may be, thereof, or
(5) In the case of any person or dealer liable to pay tax, whether any tax is payable by such person or dealer in respect of any particular sale or purchase, or if tax is payable, the rate thereof, or
(6) Whether set-off can be claimed on any particular transaction of purchase and if it can be claimed, what are the conditions and restrictions subject to which such set-off can be claimed.
The questions prescribed under rule 63 are same as the questions which were Specified in section 56.
7. What is the amount of Fee to be paid with each application & how it should be paid?
Ans. Application Fees of Rs.2,000/- shall be paid by the applicant, as provided in rule 73(2)Sr.16. Fees shall be paid electronically in Form MTR-6. This fee is nonrefundable. [GN No. VAT-1516/CR-64/Tax.1 dated 29th Apr. 2016].
8. How many copies of the application are to be filed, to whom are they to be addressed?
Ans. Each application for AR shall be filed in quadruplicate, which shall be addressed and submitted to be the Commissioner of Sales Tax. The applicant also has to file one copy along with contention and relied documents electronically.
9. By what mode can an Application be sent to the Authority?
Ans. Presently, it can be filed by the applicant in person or by his authorized representative in the office of Commissioner of Sales Tax, Maharashtra State, Mumbai or by registered post or by courier service or by speed post. Application shall be received during the office hours on any working day.
The changes regarding filing Online Applications will be intimated in due course of time.
10. Who may pass the A. R. Order?
Ans. The Commissioner may either himself pass A.R. order or he may transfer the application to the A.R.A. In case of transferred application A.R.A. will pass the Order.
11. What will be the subordination of A.R.A.?
Ans. A.R.A. shall be subordinate to the Commissioner.
12. Under which circumstances application for A.R. will be refused?
Ans. Application for A.R. shall not be accepted if the applicant has already raised the said question before the Hon. Tribunal, Hon. Bombay High Court or the Hon. Supreme Court and is pending. The application shall also not be accepted if a question raised in the application relates to a transaction or issue which is designed apparently for avoidance of tax. The application which are not submitted in prescribed form and not supported with proof of payment of fees shall not be accepted.
13. What are the circumstances & method of accepting A.R. applications?
Ans. The Commissioner or the Advance Ruling Authority may call for a report from the concerned Joint Commissioner of Sales Tax (such as Nodal Division, VATAdm or case may be). The concerned Joint Commissioner shall send his report in Form 703A. [GN No VAT-1516/CR-64/Taxn. I dated 29th Apr. 2016]. The intimation regarding acceptance of the application shall be communicated to the applicant in Form 703B within 30 days from the date of submission of the application by him.
Q.14 What is provision regarding withdrawal of A.R. application?
Ans. An applicant, if he so desires, may withdraw his application within 30 days from the date of submission.
Q.15 What is provision regarding rejection of A.R. application?
Ans. The Commissioner or the A.R.A. may reject an application by affording an opportunity of hearing to the applicant and by recording the reasons for rejection of application [Sec. 55(7) (d)].
Q.16 What is the prescribe time limit to pass A.R. Order?
Ans. The A.R. order shall be passed within 90 days from the date of acceptance of the application.
Q.17 What is meant by an advance ruling being of a binding in nature?
Ans. The A.R. order passed by the Commissioner shall be binding on all the officers including appellate authority and also on the A.R.A in respect of the similarly situated persons. [Sec. 55(8) (a)]. The A.R. order passed by the A.R.A shall be binding on all the officers (other than the Commissioner) including appellate authority in respect of the similarly situated persons. [Sec. 55(8)(b)]
Q.18 What will be an applicability of A.R. order to other similarly situated persons?
Ans. The Commissioner or, as the case may be, the A.R.A. , may direct that the A.R. shall not affect the liability of the applicant or, if the circumstances so warrant of any other person similarly situated, as respect to any sale or purchase effected prior to the A.R.[Sec. 55(9)].
Q.19 Before which forum can appeal against the A.R. order be filed and what will be the time limit for filing appeal?
Ans. The appeal against the A. R. order shall lie to the Hon. Maharashtra Sales Tax Tribunal. The Tribunal shall entertain an appeal only if it is filed within thirty days from the date of communication of the A.R. order to the Applicant [Sec. 55(10].
Q.20 What is the meaning of “Orders of the Commissioner to prevail?”
Ans. The A.R. order passed by the A.R.A.shall be subject to any directions or, as the case may be, instructions of the Commissioner, issued under section 10(10) and any DDQ order passed by the Commissioner uis 56. [Sec. 55(12)].
Q.21 What are the provisions for Rectification of A.R. Order and time limit for Rectification?
Ans. The Commissioner or, as the case may be, the A.R.A. may on his own motion. rectify any mistake apparent from the record and may rectify any order passed by it before the order so issued has been given effect to by the officer concerned. The applicant may apply in Form 703D [GN No. VAT-1516/CR-64/Taxn. I dated 29th Apr. 2016] for rectification bringing to the notice of the Commissioner or, as the case may be, A.R.A., any such mistake within thirty days from the date of receipt of the said order. The applicant shall be given a reasonable opportunity of being heard, before passing the rectification order, [Sec55 (13)].
Rectification order shall be passed within a period of sixty days from the date of receipt of the Advance Ruling Order [Sec.55 (13) Second Proviso].
Q.22 What is the mechanism regarding Review of Order passed by A.R.A.?
Ans. The Commissioner can on his own motion call for the record of any A.R. issued by the A.R.A. to examine as to whether the said ruling is erroneous in so far as it is prejudicial to theinterest of revenue [Sec. 55(14) (a)].A notice in Form 703E (GN No. VAT-1516/CR-64/Taxn. I dated 29th Apr. 2016) shall be issued by the Commissioner to initiate the proceedings. After verification of records and hearing the applicant, a just and proper order shall be passed.
Q.23 What is the mechanism regarding Review of Order passed by the Commissioner?
Ans. The Commissioner may also, for reasons to be recorded in writing on his own motion, review the A.R. order passed by him and pass such order as he thinks just and proper. However, before initiating any such action, the Commissioner shall obtain prior permission of the State Government. Such permission shall also be obtained when the A.R. order is proposed to be made contrary to an order passed by the Commissioner under section 56 [sec. 55(14)].
Q.24 What is the meaning of prospective effect to Review Order?
Ans. The Commissioner may direct that, the order of review shall not affect the liability of the person in whose case review is made in respect of any sale or purchase effected prior to the review and may likewise, if the circumstances so warrant, direct accordingly in respect of any other person similarly situated.
Q.25 What is the limitation period of Review?
Ans. The Review order, in respect of the A.R. order passed by the A.R.A. shall be passed within six months from the end of the year containing the date of Advance Ruling. Review order, in respect of an order passed by the Commissioner shall be passed within three months from the end of the month in which the State Government gives permission to initiate action of Review.
No. ARA/FAQ/2016-17/ B.24 Mumbai Dated 22.09.2016
(A.H. RATHOD)
CHAIRMAN,
ADVANCE RULING AUTHORITY,
MUMBAI (MAHARASHTRA STATE)
OFFHAND
The intriguing implications of , besides any others, the Qs 17 and 18, and official Ans. thereto, seemingly having far reaching, rather over reaching ,
consequences, may have instantly lead to ‘raising of eye brows’ in worry;
provided, of course, of only limited those, who know and remember how these aspects are quite distinctly but prudently better covered in the law on income-tax.
Law Experts may share if incited to think; and happen to stumble with a counter view !