Advance Rulings Under GST – Advanced Tax Laws and Practice Important Questions
Question 1.
State the matters on which Advance Ruling can be sought under GST Law. State any four such matters as specified under the CGST Act, 2017.
Answer:
Under section 97(2) of the CGST Act, 2017, Advance Ruling can be sought for the following questions/matters/issues:
- Classification of any goods or services or both;
- Applicability of a notification issued under the provisions of this Act;
- Determination of time and value of supply of goods or services or both;
- Admissibility of Input Tax Credit of tax paid or deemed to have been paid;
Question 2.
Bharghav Pesticides Ltd., a domestic company, intends to start a business in Kolkata, involving supply of certain goods, mostly meant for foreign buyers in China. There is some difficulty in the classification of the goods. Can the company seek advance ruling from the Authority for Advance Ruling formed under CGST Act, 2017 in respect of the issue of classification of goods? Can the company also seek ruling on issues involving place of supply?
Answer:
Advance Ruling
Advance ruling under GST can be sought by a registered person or a person desirous of obtaining registration under GST law [Section 95(c) of the CGST Act, 2017]. Therefore, it is not mandatory for a person seeking advance ruling from the AAR formed under CGST Act, 2017 to be a registered person.
Section 97(2) of the CGST Act, 2017 enjoins that the questions/matters on which the advance ruling can be sought for determining the classification of any goods or services or both. Therefore, the Company can seek the advance ruling for determining the classification of goods proposed to be supplied.
Determination of place of supply is not one of the specified questions/matters on which advance ruling can be sought under section 97(2). Further, section 96 of the CGST Act, 2017 provides that AAR constituted under the provisions of a SGST/UTGST Act shall be deemed to be the AAR in respect of that State /Union territory.
Thus, AAR is constituted under the respective State /Union Territory Act and not under the Central Act. This implies that ruling given by AAR will be applicable only within the jurisdiction of the concerned State/Union territory.
It is also for this reason that the question on determination of place of supply cannot be raised with the AAR. Hence, the applicant cannot seek the advance ruling for determining the place of supply of the goods proposed to be supplied by the applicant.
Question 3.
Briefly explain the procedure to be followed by the Authority for Advance Ruling on receipt of application for Advance Ruling under section 98 of CGST Act, 2017.
Answer:
The procedure to be followed by the Authority of Advance Rulings (AAR) on receipt of the application for advance ruling under section 98 of the CGST Act is as under:
1. Upon receipt of an application, the AAR shall send a copy of application to the officer in whose jurisdiction the applicant falls and call for all relevant records.
2. The AAR may then examine the application along with the records and may also hear the applicant. Thereafter he will pass an order either admitting or rejecting the application.
3. Application for Advance Ruling will not be admitted in cases where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions under this Act.
4. If the application is rejected, it should be by way of speaking order giving the reasons for rejection and only after giving an opportunity of being heard to the applicant.
5. If the application is admitted, the AAR shall pronounce its ruling on the question specified in the application. Before giving its ruling, it shall examine the application and any further material furnished by the applicant or by the concerned departmental officer.
6. Before giving the ruling, AAR must hear the applicant or his authorised representative as well as the jurisdictional officers of CGST/SGST.
7. If there is a difference of opinion between the two members of AAR, they shall refer to the point of points on which they differ to the Appellate Authority for hearing the issue.
8. The Authority shall pronounce its Advance Ruling in writing within 90 days from the date of receipt of application.
9. A copy of the Advance Ruling duly signed by members and certified, in a prescribed manner shall be sent to the applicant, the concerned officer, and the jurisdictional officer.
Advance Rulings Under Gst Notes
- Sections 95-106 of CGST Act, 2017 covers provisions with respect to Advance Rulings.
- Meaning of “Advance Ruling”.
- “Applicant” for Advance Ruling mechanism.
- Role and constitution of Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR).
- Questions for which Advance Rulings can be sought.
- The procedure with respect to Advance Rulings.
- Applicability of Advance Ruling.
- Instances where advance ruling becomes “void ab initio’’