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In general terms, an advance tax ruling is a written interpretation of tax laws. Advance ruling under GST helps individuals plan their activities 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!
“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.
The major objectives of any advance ruling, including that under GST, are the following:
This applies to applicants and concerned officers. Therefore stating 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.
Anyone accountable for paying tax can request an advance ruling. It applies on:
Following are the steps one can follow to apply for the advance ruling of GST seamlessly.
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.
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 three months of the appeal. 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 tax 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.
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