{"id":15367,"date":"2020-08-26T15:46:31","date_gmt":"2020-08-26T10:16:31","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=15367"},"modified":"2020-08-28T12:32:58","modified_gmt":"2020-08-28T07:02:58","slug":"objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/","title":{"rendered":"Objective, Mechanism, Powers, and Procedure for Obtaining Advance Ruling under GST"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Numerous interpretational issues lead to unintended disputes between taxpayers and tax administration and in order to provide certainty to taxpayers and to avoid future litigation, \u2018Advance Ruling\u2019 is one of the most prevalent Dispute Resolution Mechanism.  It helps the applicant in planning his activities which are liable for paying for <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST Registration<\/strong><\/a>, well in advance.  <\/p>\n\n\n\n<p>This ruling is binding to the applicant as well as the government itself. The procedure followed is inexpensive and expeditious. Hence, it provides a certainty to the taxpayers with respect to an issue which might cause a dispute with the tax administration. Authority for Advance Ruling (AAR) is a legally constituted body which is authorized to give a binding ruling to the applicant who is a registered person. This ruling can be appealed before an Appellate Authority for Advance Ruling (AAAR). <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/#Meaning_of_Advance_Ruling_Under_the_GST_Act\" >Meaning of Advance Ruling Under the GST Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/#Advance_Ruling_Under_GST_necessary\" >Advance Ruling Under GST necessary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/#Objective_Mechanism_of_Advance_Ruling_under_GST\" >Objective Mechanism of Advance Ruling under GST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/#Powers_of_AAR_and_AAAR\" >Powers of AAR and AAAR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/#Procedure_for_Obtaining_Advance_Ruling\" >Procedure for Obtaining Advance Ruling<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/objective-mechanism-powers-and-procedure-for-obtaining-advance-ruling-under-gst\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Advance_Ruling_Under_the_GST_Act\"><\/span>Meaning of Advance Ruling Under the GST Act<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>\u201cAdvance ruling\u201d means a decision that is&nbsp;provided by the Authority (AAR) or the Appellate Authority(AAAR) to an applicant inclusive of matters that are mentioned in section 97(2) or section 100(1) of the CGST Act, 2017 which is related to the rendering of goods and services to be undertaken by the applicant. Hence, the challenges in the interpreting of law gave birth to Advance ruling and since, to avoid litigation the facility has been provided to the GST. Advance Ruling Under GST necessary <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/procedure-for-appeals-under-gst\/\">Procedure for Appeals under GST<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advance_Ruling_Under_GST_necessary\"><\/span>Advance Ruling Under GST necessary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"580\" height=\"340\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-110.png\" alt=\"Advance Ruling Under GST necessary\" class=\"wp-image-15385\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-110.png 580w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/08\/image-110-300x176.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Objective_Mechanism_of_Advance_Ruling_under_GST\"><\/span>Objective Mechanism of Advance Ruling under GST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The comprehensive objective of including the mechanism of Advance Ruling is:<\/strong><\/em><\/p>\n\n\n\n<ul><li>To\nprovide in advance, the certainty and transparency in tax liability when an\nactivity is proposed to be undertaken by the applicant,<\/li><li>To\nattract foreign direct investment (FDI),<\/li><li>To\nlower the number of litigations,<\/li><li>Pronounce\nruling to be more expeditious, inexpensive and transparent.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Powers_of_AAR_and_AAAR\"><\/span>Powers of AAR and AAAR<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Both\nthe AAR and AAAR are entrusted with the powers of a civil court under Code of\nCivil Procedure,\n1908, for the purpose of discovery and scrutiny and also enforcing the\nattendance of a person and examining him on oath, and encouraging production of\nbooks of account and other records. <\/p>\n\n\n\n<p>Both the authorities are presumed to be a civil court for the purposes of section 195 of the <strong><em>Code of Criminal Procedure, 1973<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Code_of_Criminal_Procedure_(India)\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>. Any proceeding that is presented before the authority is considered to be a judicial proceeding under sections 193 as well as section 228 of the Indian Penal Code, 1860. The AAR and AAAR are incorporated with the power of modulating their own procedure. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_Obtaining_Advance_Ruling\"><\/span>Procedure for Obtaining Advance Ruling<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An advance ruling as pronounced by AAR\nor AAAR is binding only on the applicant who has registered for the advance\nruling and on the concerned officer or the jurisdictional officer with respect\nto the applicant. This clearly indicates that an advance ruling is not\napplicable to similarly placed other taxable persons in the State. It is\nlimited to the person who has applied for an advance ruling. <\/p>\n\n\n\n<p>An applicant who is desirous of\nobtaining the ruling is supposed to make an application to the AAR in a\nprescribed format. The format of the form and the procedure for application\nhave been prescribed in Rule 104 of the CGST Rules, 2017. An application in\norder to obtain an advance ruling under section 97(1) of the act is supposed to\nbe made in form GST ARA-01 and shall be submitted along with a fee of five\nthousand rupees,&nbsp;is to be deposited in the manner specified in section 49\nwhich deals with the mechanism of payment through electronic cash and credit\nledgers. <\/p>\n\n\n\n<p>The application and the verification is\ncontained therein and all the pertinent documents accompanying such application\nshall be signed. Rule 26 provides for the manner of document authentication\nthrough&nbsp;e-signature as it is specified in the Information Technology Act.\nUpon receipt of an application, the AAR is supposed to send a copy of\napplication to the officer under whose jurisdiction the applicant falls and is\nrequired to call for all relevant records. The AAR later scrutinizes&nbsp;the\napplication along with the records and also hears the applicant.<\/p>\n\n\n\n<p>Thereafter, the AAR will pass an order\nregarding whether the application is rejected or accepted. If in case of\nrejection of the application, the opportunity of being heard is to be provided\nto the application and the reasons for which the application is being rejected\nare to be specified.In case of acceptance of the application, within 90 days of\nits receipt, the AAR should pronounce the ruling. But before pronouncing the\nruling, the application should be well scrutinized and the AAR hears the\napplicant or his representative as well as the CGST\/SGST officers. <\/p>\n\n\n\n<p>If there is a conflict of thoughts\nbetween&nbsp;the two members of AAR, they shall refer to the point or points on\nwhich they differ to the AAAR in order to hear the issue. If the members of\nAAAR are incapable of coming to a common conclusion in regard to the points\nreferred by the AAR, then it shall be presumed that no advance ruling can be\ngiven in respect of the question on which the difference continues at the level\nof AAAR.<\/p>\n\n\n\n<p>GST law treats a person having a number\nof registrations in same or different states as distinct persons. The first dispute\nto erupt was whether a person who is registered with GST authorities in\ndifferent states, can seek separate ruling in each state. In the case of <em>HINDUSTAN\nCOCA COLA BEVERAGES PVT LTD<\/em>, the taxpayer\u2019s application was refused by the\nAAR under section 98(2) of the CGST Act on the ground that the same was already\nanswered by the Gujarat AAR in the taxpayer\u2019s own case.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There is a comprehensive provision made by the law in order to ensure that there are minimal disputes by incorporating the mechanism of Advance Ruling. The taxpayer is given obligations under the GST Act along with certainty and expeditious ruling for the smooth functioning of the relationship between the taxpayer and the administration and to avoid unnecessary litigation.&nbsp;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/selective-applicability-of-gst-regulation-by-aar\/\">Latest: Selective Applicability of GST Regulation by AAR<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Numerous interpretational issues lead to unintended disputes between taxpayers and tax administration and in order to provide certainty to taxpayers and to avoid future litigation, \u2018Advance Ruling\u2019 is one of the most prevalent Dispute Resolution Mechanism. It helps the applicant in planning his activities which are liable for paying for GST Registration, well in advance. [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":15387,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[922],"acf":{"service_id":"334"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":4402,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15367"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=15367"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15367\/revisions"}],"predecessor-version":[{"id":15469,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15367\/revisions\/15469"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/15387"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=15367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=15367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=15367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}