Advance Rulings in GST – Relevance & Benefits
Securing an advance ruling is beneficial for the applicant as it enables them to plan their activities subject to Goods and Services Tax payment well in advance. The ruling, issued by the Authority for Advance Ruling, ensures certainty in determining tax liability, and its binding nature applies to both the applicant and government authorities.
Additionally, it aids in preventing prolonged and costly legal disputes in the future. The process of seeking an advance ruling is cost-effective and straightforward, providing a quick resolution. This not only offers clarity and transparency to taxpayers regarding potential issues with the tax administration but also avoids the need for extensive litigation.
AAR & AAAR
The Authority for Advance Ruling (AAR), a legally established body, can provide a conclusive ruling for registered taxable persons or those obligated to register. In the event of disagreement, the advance ruling can be contested before the Appellate Authority for Advance Ruling (AAAR), and specific timelines are established for the AAR and AAAR to issue their orders.
Matters/questions specified in Section 97(2) & Section 100(1) of the CGST Act, 2017
(a) Classification of any goods or services or both?
(b) Applicability of a notification issued under the provisions of CGST 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 an 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?
Section 100(1) of the CGST Act, 2017 provides that the concerned officer, the jurisdictional officer or an applicant aggrieved by any advance ruling pronounced by the Authority for Advance Ruling, may appeal to the Appellate Authority.
Thus it can be seen that a decision of the Appellate authority is also treated as an advance ruling.
Procedure for filing GST Advance Ruling Application to Authority for Advance Ruling (AAR):
1. An application for obtaining advance ruling shall be made on the common Goods and Services Tax portal in form GST ARA-01, in accordance with Rule 104 of Central Goods and Services Tax Act/State Goods and Services Tax Act Rules 2017.
2. The application shall be accompanied by a fee of five thousand rupees each under the Central Goods and Services Tax Act and State Goods and Services Tax Act Act, which is to be deposited online in terms of section 49 of the Central Goods and Services Tax Act/State Goods and Services Tax Act Rules 2017.
3. The application, the verification contained therein, and all relevant documents accompanying such application shall be signed in the manner specified in rule 26 of Central Goods and Services Tax Act Rules 2017.
Procedure on receipt of advance ruling application:
4. Upon receipt of an application, the authority of advance ruling (AAR) shall send a copy of the application and call for all the relevant records from the jurisdiction officer.
5. The authority for advance ruling may then examine the advance ruling application along with the records and may also hear the applicant.
6. Thereafter, the AAR will pass an order either admitting or rejecting the application.
7. Before giving the ruling, AAR must hear the applicant or his authorized representative as well as the jurisdiction officers of Central Goods and Services Tax Act/State Goods and Services Tax Act.
a) When an application is admitted:
8. The authority shall pronounce its advance ruling in writing within 90 days from the date of receipt of the application.
b) When an application is not admitted:
9. The authority shall not admit the application where the question raised is already pending or decided in any proceedings in any case of an applicant under any provision of Central Goods and Services Tax Act Act.
10. No application shall be rejected unless an opportunity of hearing has been given to the applicant.
11. Where the application is rejected, the reasons for such rejection shall be specified in the order.
Difference of opinion between the two members of AAR:
In case of a difference of opinion between two members of the Authority for Advance Ruling (AAR), the matter will be referred to the Appellate Authority for Advance Ruling (AAAR).
If the members of AAR are unable to come to a decision, then the matter would be deemed that no advance ruling can be given.
Checklist of an Application for Authority for Advance Ruling under GST:
1. Whether the application is filled online in GST ARA-01?
2. Whether hard copies of the ARA-01 are submitted in quadruplicate?
3. Whether the requisite fee of Rs. 10,000/-(State Goods and Services Tax Act-5000/-and Central Goods and Services Tax Act-5000/-) is paid?
4. Whether verified by the applicant?
5. Whether the email address and contact number of the applicant are provided?
6. Whether the correct name and address of the jurisdiction officer is provided?
7. Whether the relevant clause of section 97(2) of the act has been specified?
8. Whether all annexures as per application are duly attached?
9. Whether the issues on which the ruling is sought are specified in the application?
10. Whether the applicant has disclosed the status regarding the questions being raised or pending before any other authority under GST Acts?
11. Whether any submission is made regarding the applicant’s view on the question raised in the application?
Procedure for filing Appeal against the order of Authority for Advance Ruling (AAR) with Appellate Authority for Advance Ruling (AAAR):
1. The concerned officer, the jurisdictional officer, or an applicant aggrieved by an advance ruling may file an appeal with the Appellate Authority for Advance Ruling (AAAR) in accordance with rule 106 of Central Goods and Services Tax Act/State Goods and Services Tax Act rules 2017.
2. The appeal shall be filed within a period of 30 days from the date on which the ruling sought to be appealed against is communicated.
3. The appeal shall be made on the common GST portal and shall be accompanied by fees deposited in the manner specified in section 49.
4. An appeal shall be made as follows:
In form GST ARA-02 by an applicant along with fees of Rs. 10,000 each under Central Goods and Services Tax Act and State GST Acts.
In form GST ARA-03 by the concerned officer or the judicial officer without any fees.
5. The appeal (by the applicant or jurisdictional officer), the verification contained therein, and all the relevant documents accompanying such appeal shall be signed in the manner specified in Rule 7.
6. The order shall be passed within a 90-day period from the date of filing the appeal.
Difference of opinion between the two members of AAAR:
7. Where the members of the appellate authority differ on any point referred to in the appeal, it shall be deemed that no advance ruling can be issued in respect of the question under the appeal.
Checklist of Receiving Application for Appeal against the order of Authority for Advance Ruling Under GST:
1. Whether the application is filled online in GST ARA-02/03, as the case may be?
2. Whether hard copies of the ARA-02/03, as the case may be, are submitted in quadruplicate?
3. Whether the requisite fee of Rs. 20,000/-(State Goods and Services Tax Act-10000/and Central Goods and Services Tax Act-10000/-) is paid?
4. Whether verified by the applicant?
5. Whether the email address and contact number of the applicant are provided?
6. Whether the correct name and address of the jurisdiction officer is provided?
7. Whether the certified copy of the order of Authority for Advance ruling against which the appeal is preferred is attached?
8. Whether all annexures as per the application are duly attached?
9. Whether the issues on which the ruling is sought are specified in the application?
10. Whether any submission is made regarding the applicant’s views on the issue raised in the application?
Conclusion
This article emphasizes the significance of a well-prepared filing checklist when submitting an application for an appeal against the AAR’s order. A systematic and thorough approach at this stage is essential to ensure the success of the appeal process.
In essence, the application and appeal processes outlined in this article, coupled with the checklist provided, serve as a comprehensive resource for businesses navigating the complexities of GST Advance Rulings.
By leveraging the insights and guidelines presented, businesses can enhance their understanding, mitigate risks, and make informed decisions in the dynamic landscape of Goods and Services Tax.
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