GST Advance Ruling System will take Time to Resolve: CBIC

The Member of the Central Board of Indirect Taxes and Customs ( CBIC ) has said that the present advance ruling system will take some more time to resolve as there is no consensus between the union government and states over the uniform central body.

“The Centre is also trying to push for that there has to be a single, uniform, advance ruling authority. But unfortunately, think about a situation, every state says, I am having an equal right as the Centre,” John Joseph, CBIC member (budget) said addressing a conference organized by Associated Chambers of Commerce (ASSOCHAM).

Adding that there is a huge disenchantment between the states even for the regional benches, the government goes through the entire ruling, study the issue and then issue a clarification.

At present, each States have its own AAR benches consisting of government officials and the rulings are specific to the concerned states. As such, contrasting rulings by AARs on solar panels and other issues have disturbed the industry.

“I do agree that industry is having a serious problem with regards to advance ruling. We have been seeing that in the case of solar power,” Joseph said.

“Once the clarification is issued, the entire advance ruling thing becomes null and void. Maybe for some time, you will have to adjust to the situation till a trust is being developed between the Centre and the states,” he said.

The CBIC member said that the issue will take time to get resolved, especially due to the “trust deficit” between the Centre and states in the GST Council, on account of allocation of revenue that accrues from the rulings.

Joseph said that a simpler and better version of the new GST return format will be released initially, which will become comprehensive later, improving the quality of the return over time. “Things that happened in the past may not happen this time,” he said.

On compliance, he admitted that initially, the government did not want to go hard on businesses, but has changed the stance since April. “We have detected almost Rs 120 billion worth of GST evasion this year. This is huge compared to what happened in the central excise regime,” he added.

The most important outcome under GST is the improvement in the logistics chain. The time taken for trucks to move from one point to other point has almost been halved or one-third, he said.