SURAT CHAPTER OF WIRC OF ICAI GST “ADVANCE RULING” SURAT CHAPTER OF WIRC OF ICAI Dated 08/07/2017 A Presentation by CA. (Dr.) Shailendra Saxena   B.COM,SAP(FICO),ACS,FCMA,FCA,DISA(ICAI).Ph.D.

Advance Ruling Under GST

WHAT IS Advance Ruling As per section 95 of CGST/SGST Law, ‘advance ruling’ means a written decision provided by the authority to an applicant on matters or on questions as enumerated in section 97(2) appeals thereon (section 100(1). In relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

Advance Ruling Authority Jurisdiction Each State will have its own Advance Ruling Authority. The Authority will comprise one member CGST and one member SGST. Who can apply? Any person registered or desirous of obtaining registration under the Act.

SIGNIFICANCE OF Advance Ruling Authority Helps the applicant in planning his activities which are liable for payment of GST, well in advance Determining the tax liability well in advance Binding on the applicant as well as Government authorities Avoiding long drawn and expensive litigation at a later date Seeking an advance ruling is inexpensive and the procedure is simple and expeditious Certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration Authority for Advance Ruling (AAR) can give a binding ruling to an applicant who is a registered taxable person or is liable to be registered The advance ruling given by the Authority can be appealed before an Appellate authority for Advance Ruling (AAAR).

Objectives for setting up Advance Ruling Authority provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant; Attract Foreign Direct Investment (FDI); Reduce litigation; Pronounce ruling expeditiously in transparent and inexpensive manner;

The questions for which Advance Ruling can be sought (Sec.97) a)Classification of goods / services; b)Applicability of a notification c)Principles to be adopted for the purposes of determination of value of the goods and/or services d)Admissibility of input tax credit of tax paid or deemed to have been paid; e)Determination of the liability to pay tax on any goods and/or services under the Act; f)Whether applicant is required to be registered under the Act; g)Whether any particular thing done by the applicant with respect to any goods and/or services amounts to or results in a supply of goods and/or services, within the meaning of that term.

“Procedure for obtaining Advance Ruling (Sec97 &98) Applicant desirous of obtaining advance ruling should make application to AAR in a prescribed form and manner. The format of the form and the detailed procedure for making application will be prescribed in the Model GST Rules. The AAR shall send a copy of application to the officer in whose jurisdiction the applicant falls and call for all relevant records. 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. Application has to be invariably rejected in certain situations as prescribed under section 98 (2) which are enumerated as below: (a) if the question raised in the application is already pending in the applicant’s case before any First Appellate Authority, the Appellate Tribunal or any Court; (b) if the question raised in the application is the same as in a matter already decided by the First Appellate Authority, the Appellate Tribunal or any Court; (c) if the question raised in the application is the same as in a matter in the applicant’s case already decided by the adjudicating authority or assessing authority, whichever is applicable. If the application is rejected, it should be by way of a speaking order giving the reasons for rejection.

Calling of records for admitting application for Advance Ruling (Sec 98) ISSUE: Suspense about admissibility of application cannot be kept so long to witness examination of application, records etc. and after the entire process it is stated that the application may not admissible. It is suggested that decision to admit application is to be taken before calling for records from officers.

Appeals against order of AAR (Sec. 99 &100) The If the applicant is aggrieved with the finding of the AAR, he can file an appeal with AAAR. Similarly, if the prescribed or jurisdictional officer of CGST/SGST does not agree with the finding of AAR, he can also file an appeal with AAAR. The concerned officer will be the officer in whose jurisdiction the applicant is located. In such cases the concerned officer will be the jurisdictional CGST/SGST officer Any appeal must be filed within thirty days from the receipt of the advance ruling. The appeal has to be in prescribed form and has to be verified in prescribed manner. This will be prescribed in the Model GST Rules. The Appellate Authority must pass an order after hearing the parties to the appeal within a period of ninety days of the filing of an appeal. If members of AAAR differ on any point referred to in appeal, it shall be deemed that no advance ruling is issued in respect of the question under appeal. shailendra.saxena@jlnus.com

To whom the Advance Ruling is applicable (Sec. 103) Advance ruling pronounced by AAR or AAAR shall be binding only on the applicant and on the jurisdictional tax authority of the applicant. Advance ruling is not applicable to similarly placed taxable persons in the State It is only limited to the person who has applied for an advance ruling.

Time period for applicability of Advance Ruling[Sec.103 &104] The law does not provide for a fixed time period for which the ruling shall apply. Advance ruling shall be binding till the period when the law, facts or circumstances supporting the original advance ruling have changed Advance ruling shall be held to be ab initio void if the AAR or AAAR finds that the advance ruling was obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts. In such a situation, all the provisions of the CGST/SGST Act shall apply to the applicant as if such advance ruling had never been made

THANKS!! Any Questions ? Contact for post sessionquery: CMA. (Dr.) Shailendra Saxena  | Bharuch E-mail: shailendra.saxena@jlnus.com Cell: +91-93774-10260 | Website: www.jlnus.com shailendra.saxena@jlnus.com