PROCEDURE FOR GETTING ADVANCE RULING FROM AUTHORITY FOR ADVANCE RULING

[Mr. M. GOVINDARAJAN]

Advance Ruling

Section 95(a) of Central Goods and Services Tax Act, 2017 (‘Act’ for short) defines the expression ‘Advance Ruling’ as a decision provided by-

• the Authority for Advance Ruling to an applicant on matters or on questions specified in section 97(2) in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant;  or
•  the Appellate Authority for Advance Ruling to the appellant on appeal filed by the registered person or the jurisdictional officer under section 100(1) against the ruling given by the Authority for Advance Ruling; or
•  the National Appellate Authority for Advance Ruling on appeal against conflicting Advance Rulings given by the Appellate Authorities of two or more States or Union territories or both under section 101C.

Authority for Advance Rulings

The provisions of the Act and the provisions of the State/Union Territory Goods and Services Tax Acts are almost similar except for the constitution of Authority for Advance Ruling.  There is no separate Authority for Advance Ruling under the Act.   Section 96 of the Act provides that 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.  The Government shall appoint officers not below the rank of Joint Commissioner as member of the Authority for Advance Ruling.

Question on which the advance ruling can be sought

Section 97(2) provides that the question on which the advance ruling is sought under this Act, shall be in respect of-

1. classification of any goods or services or both;
2. applicability of a notification issued under the provisions of this 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.

Procedure before Authority for Advance Ruling

The following are the stages in getting advance ruling from the Authority of Advance Ruling-

• Filing of application;
• Admission/rejection of application;
• Hearing the case by the Authority for Advance Ruling;
• Withdrawal of application, if any;
• Ruling by the Authority for Advance Ruling.

Filing of application

Any person who is registered under the GST law or is desirous of obtaining an advance ruling may apply to seek advance ruling on the matters prescribed in the Act.  The applicant should be a proper person and competent to file the application.  Even an unregistered person may also seek advance ruling for which a separate procedure is there.

Form

An applicant desirous of obtaining an advance ruling may make an application in Form GST – ARA 01, stating the question on which the advance ruling is sought.  The application, the verification contained therein and all the relevant documents accompanying such application shall be signed.

Fees

A fee of Rs.5000/- is to be deposited in electronic cash ledger for each State and Central and thus total Rs.10,000/- is payable as fee for getting advance ruling. Every deposit made towards fee by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.  The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made there under in such manner and subject to such conditions and within such time as may be prescribed.

Proper application

While filing the application for Advance Ruling care shall be taken that it is not deficient in any matter.  If there is any defect it may be possible for the rejection of the application by the Authority for Advance Ruling.  The following points shall be taken into consideration-

• The questions should be framed correctly;
• Questions must be specific;
• Complete information is to be provided.

Admission/Rejection of application

• On receipt of an application, the Authority for Advance Ruling shall forward a copy of the application to the concerned officer and, if necessary, call upon him to furnish the relevant records.
• Where any records have been called for by the Authority for Advance Ruling in any case, such records shall, as soon as possible, be returned to the said concerned officer.
• The Authority for Advance Ruling may, after examining the application and the records called for and after hearing the applicant or his authorized representative and the concerned officer or his authorized representative, by order, either admit or reject the application.
• If the application is admitted the Authority for Advance Ruling will proceed to further to hear the applicant and the Revenue.
• The Authority for Advance Ruling may reject the application after giving an opportunity to the applicant o f being heard.
• The Authority for Advance Ruling while rejecting the application, he should record the reasons for such rejection.
• A copy of the order for admission or rejection shall be sent to the applicant and the concerned officer.

The application for advance ruling may be rejected by the Authority for Advance Ruling on the following grounds-

• 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 this Act;
• absence of jurisdiction to entertain the application;
• beyond the scope of advance ruling;
• other reasons.

No application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant.  Where the application is rejected, the reasons for such rejection shall be specified in the order.

Ruling

Where an application is admitted the Authority for Advance Ruling shall, after examining such further material as may be placed before it by the applicant or obtained by the Authority for Advance Ruling and after providing an opportunity of being heard to the applicant or his authorized representative as well as to the concerned officer or his authorized representative, pronounce its advance ruling on the question specified in the application within 90 days from the date of receipt of application.

A copy of the advance ruling shall be certified to be a true copy of its original by any member of the Authority for Advance Ruling.  A copy of the advance ruling pronounced by the Authority for Advance Ruling shall be duly signed by the members and certified copy shall be sent to the applicant, the concerned officer and the jurisdictional officer after such pronouncement.

Contents of Ruling

• The contents of the orders of the Advance Ruling given by the Authorities for Advance Ruling are almost in the same form.
• The contents of the Ruling may be of-

• Preamble;
• Proceedings;
• Brief facts of the case;
• Questions raised before the Authority for Advance Ruling;
• Admission of the application;
• Submission of the applicant;
• Department’s view point;
• Record of personal hearing;
• Discussions and findings;
• Ruling.

Reference

Where the members of the Authority for Advance Ruling differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for Advance Ruling for hearing and decision on such question.

Powers of Authority for Advance Ruling

• The Authority for Advance Ruling shall, for the purpose of exercising its powers regarding-

• discovery and inspection;
• enforcing the attendance of any person and examining him on oath;
• issuing commissions and compelling production of books of account and other records,

have all the powers of a civil court under the Code of Civil Procedure, 1908.

• The Authority for Advance Ruling shall be deemed to be a civil court for the purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973, and every proceeding before the Authority for Advance Ruling shall be deemed to be a judicial proceedings within the meaning of sections 193 and 228, and for the purpose of section 196 of the Indian Penal Code.

• The Authority for Advance Ruling shall have power to regulate its own procedure.

Withdrawal of application

After the admission of the application, the applicant may withdraw the application filed by him with the permission of the Authority for Advance Ruling.  The withdrawal may be voluntary or due to some other reasons.  If the application is withdrawn the fee paid by the applicant for the advance ruling will not be refunded to the applicant.

Binding of the ruling

According to section 103(1) of the CGST Act the advance ruling pronounced by the Authority for Advance Ruling shall be binding only-

• on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling;
• on the concerned officer or the jurisdictional officer in respect of the applicant.

The advance ruling given by the Authority for Advance ruling shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed.

Advance Ruling void - when?

Section 104 provides that where the Authority for Advance Ruling finds that advance ruling pronounced by it under section 98(4) has been obtained by the applicant or the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made there under shall apply to the applicant or the appellant as if such advance ruling had never been made.   No order shall be passed unless an opportunity of being heard has been given to the applicant or the appellant.    A copy of the order made shall be sent to the applicant, the concerned officer and the jurisdictional officer.

Rectification

If any error is noticed in the order of an Authority for Advance Ruling-

• by the respective Authority for Advance Ruling on its own accord; or
• brought to the notice by-

• the concerned officer; or
• the jurisdictional Officer; or
• the applicant;
• the appellant;
• the Authority for Advance Ruling; or
• the Appellate Authority for Advance Ruling

the Authority for Advance Ruling may amend the order so as to rectify the error apparent on the face of the record.  

The limitation for filing such rectification is 6 months from the date of the order.  There is no provision for condoning the delay in filing the rectification application by the Authority.

No rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made unless the applicant or the appellant has been given an opportunity of being heard.