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    What Is Advance Ruling Under GST? Procedure, Objectives & More

    advance ruling under gst

    In general terms, an advance tax ruling is a written interpretation of tax laws. Advance ruling under GST is a written decision by the tax authorities to an applicant on questions relating to the supply of goods and services being undertaken or proposed to be undertaken by the applicant. They help individuals plan their activities in advance for which they need to pay GST. This promotes transparency among taxpayers to avoid any disputes. In addition, it also helps to avoid lengthy and expensive litigation.

    Interested to learn more about this subject? Continue reading!

    [Source]

    Team Digit

    What Is Advance Ruling Under GST?

    “Advance ruling” stands for a decision the Appellate Authority provides to applicants on queries specified in sub-section (2) of Section 97 or sub-section (1) of Section 100 of the CGST Act, 2017. This is associated with the supply of goods or services an applicant undertakes.

    Unlike the present dispensation, obtaining an advance ruling under GST on a proposed transaction and those already undertaken is possible.

    [Source]

    What Are the Objectives Of Advance Ruling under GST?

    The major objectives of any advance ruling, including that under GST, are the following:

    • Offering certainty in tax liability in advance for a future activity
    • Appeals Foreign Direct Investment (FDI) as it clarifies taxation and future tax liability
    • Lowers chances of a lawsuit
    • Provides timely decisions in an inexpensive and transparent manner

    [Source]

    What are the Applications of Advance Ruling under GST?

    This applies to applicants and concerned officers. Therefore stated advance ruling under GST does not apply to other similarly placed taxable individuals.

    Moreover, there is no fixed time for its applicability. According to the law, an advance ruling shall stay in effect until the law, facts or circumstances of the original advance ruling have changed.

    When can Someone Request for GST Advance Ruling?

    An applicant can apply for an advance ruling even before taking up a transaction of proposed supply of goods and services or in respect of a supply which is being undertaken. The only restriction is that the question being raised is already not pending or decided in any proceeding in the case of the applicant. It applies on:

    • Any goods or services classified under the act
    • Application notification affecting the tax rate
    • Time and value determine the supply of goods and services
    • The input tax credit that is already paid or expected from the taxpayers to pay
    • Determining the liability to pay the tax
    • Registration of an applicant under GST
    • Anything an applicant does regarding the goods and services in supply

    Step-By-Step Process of Advance Ruling under GST

    Following are the steps one can follow to apply for the advance ruling of GST seamlessly. Section 97 and 98 deals with the procedure for obtaining advance ruling.

    Step 1: Those who want to apply for advance ruling under GST must fill out the GST ARA-01 form and pay an application fee of ₹ 5000.

    Step 2: AAR may send an application copy to the officer under whose jurisdiction the applicant resides and ask for every relevant record under their name.

    Step 3: The Authority would examine the application by referring to those records and may also hear from the applicant.

    Step 4: They will decide whether to accept or reject the allocation request.

    Those GST advance ruling applications where certain queries are raised, but their status is still pending, get rejected. Once the Authority approves an application, they shall announce the ruling within 90 days. However, before giving out the ruling, the AAR hears from the applicant, his representative, and jurisdictional officers of CGST/SGST.

    [Source]

    How to Appeal Against the Order of AAR (Authority of Advance Ruling)?

    If applicants do not agree with the decisions, they can appeal to the AAAR. In the same way, if any jurisdictional officer finds the result unacceptable, they can also appeal to the same body.

    Applicants should file this appeal within 30 days of receiving the advance ruling. Moreover, the Appellate Authority must pass an order within 90 days of filing. At any point, if the members of AAAR differ in passing the order, they will consider no advance ruling is issued.

    Till now, we discussed the meaning of advance ruling under GST, its application process, objectives and other associated questions. Hence to conclude, the primary aim of advance ruling under GST is to provide certainty to the taxpayers. This helps enhance the dependence of a taxpayer and the administration on each other and avoid unnecessary legal actions.

    [Source]

    FAQs About Advance Ruling under GST

    What power do AAR and AAAR have?

    Authority for Advance Ruling (AAR) & the Appellate Authority for Advance Ruling (AAAR) has the powers of a civil court under the Code of Civil Procedure, 1908. These authorities are responsible for discovering, inspecting, and enforcing a person's attendance and examining him on oath. [Source1] [Source2]

    Authority for Advance Ruling (AAR) & the Appellate Authority for Advance Ruling (AAAR) has the powers of a civil court under the Code of Civil Procedure, 1908. These authorities are responsible for discovering, inspecting, and enforcing a person's attendance and examining him on oath.

    [Source1]

    [Source2]

    Which advanced ruling applications tend to reject the most?

    The order of advance ruling is not possible in any pending case. In addition, the Authority may not accept an application if the same matter is decided in an earlier case for the applicant.

    The order of advance ruling is not possible in any pending case. In addition, the Authority may not accept an application if the same matter is decided in an earlier case for the applicant.

    What time gap is allowed for filing an appeal for advance ruling?

    An individual must submit the appeal within thirty days from the day of advance ruling communicated to the concerned officer or other authority. [Source]

    An individual must submit the appeal within thirty days from the day of advance ruling communicated to the concerned officer or other authority.

    [Source]

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    Last updated: 20-05-2025

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