|| Advance Ruling || Chapter XVII of CGST Act Pankaj Kannaujiya FCMA, CIPFA(UK), M.com (Tax) Practicing Cost Accountant 23 June 2018

What is the Advance Tax Ruling Advance Tax Ruling is decision issued by tax authorities to applicant on specified matters or on specified questions for certain tax matters. Advance tax ruling is applied for, before starting the proposed activity. In easier terms Advance Tax Ruling is nothing but a written interpretation of tax laws by adjudicating authority or the Appellate Authority CMA Pankaj Kannaujiya

Presence of Advance Ruling under Current Tax Laws Income Tax Law Custom Law Central Excise & VAT Goods & Service Tax CMA Pankaj Kannaujiya

Objective of Advance Ruling in GST Provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant. Attract Foreign Direct Investment (FDI) by the clarity of Taxes. Reduce Litigation Issues & Its Cost also Better Clarity & Understanding Less Expensive CMA Pankaj Kannaujiya

Who can request for Advance Ruling in GST ? Any taxable person can request for an Advance Ruling in GST when he is confused about certain provisions. CMA Pankaj Kannaujiya

When can one request ? Classification of any Goods and / or Services Advance Ruling under GST is applicable on the following: Classification of any Goods and / or Services Applicability of a notification which affects the rate of tax Determination of time and value of supply of goods and / or services Whether ITC paid (or deemed to be paid) will be allowed Determination of the liability to pay tax on any goods and / or services Whether the applicant has to be registered under GST Whether any particular activity done by the applicant regarding goods and / or services will result in a supply CMA Pankaj Kannaujiya

Levels of Advance Ruling There will be two levels of Advance Ruling in GST: Authority for Advance Ruling (AAR) & Appellate Authority for Advance Ruling (AAAR) An advance ruling under GST will first be sent to the Authority for Advance Ruling (AAR). After that if applicant not satisfied with the advance ruling decision by AAR can appeal to the Appellate Authority for Advance Ruling (AAAR) CMA Pankaj Kannaujiya

Application for Advance Ruling in GST An application for Advance Ruling in FORM GST ARA-01 with the question and a fee of Rs 5000. Once the application is received, the Authority for Advance Ruling, it will be forwarded to the concerned officer for gathering the concerned records.. CMA Pankaj Kannaujiya

Acceptance or Rejection of Application by AAR The Authority for Advance Ruling would then examine the advance ruling application along with the records furnished by the taxpayer and concerned officer. Based on the findings, the Authority for Advance Ruling can pass an order admitting or rejecting the application. In case of rejection, the applicant must be provided an opportunity of being heard and the reason for rejection of the advance ruling application must be stated in the order. Reasons for rejection shall be given in writing. It is important to note that application for advance ruling will not be accepted in cases where The same matter has already been decided in an earlier case for the applicant The same matter is already pending in any proceedings for the applicant Basically, Advance Ruling will not be possible in any pending case or any decision already given. CMA Pankaj Kannaujiya

Time-Limit for Decision by AAR Advance Ruling decision will be given within 90 days from application Advance Ruling will have prospective effect only If the concerned officer or an applicant are not satisfied by any advance ruling pronounced may appeal to the Appellate Authority (AAAR) with in 30 days (extendable) from date of Advance Ruling. CMA Pankaj Kannaujiya

Appeal to the Appellate Authority for Advance Ruling (AAAR) in GST By Applicant :If the applicant is appealing against the decision of the advance ruling then he will apply in FORM GST ARA-02 and pay Rs 10,000 fees By GST Officer: If the appeal is made by a GST tax officer, then the applicable form is FORM GST ARA-03. No fee is applicable. CMA Pankaj Kannaujiya

Decision of the Appellate Authority The Appellate Authority can confirm or modify the ruling appealed against. Appellate Authority will give its decision within 90 days from application. If the members of the Appellate Authority differ in opinion on any point, then advance ruling cannot be issued. CMA Pankaj Kannaujiya

Important point in Advance Ruling The Authority or the Appellate Authority can amend its own order to rectify any apparent mistake if it is noticed within 6 months from the date of the order by – The Authority or the Appellate Authority on its own or By the prescribed or the jurisdictional CGST / SGST officer or The applicant Any rectification which will result in increase in tax liability or decrease in input tax credit (i.e., a negative impact) will be done only after giving notice and an opportunity of being heard to the applicant. If the law or the facts of the original advance ruling change then the advance ruling will not apply. CMA Pankaj Kannaujiya

Conclusion YES NO Appeal to AAAR Confused about applicability of Tax Provisions Apply for Advance Ruling YES Advance Ruling is applicable NO Appeal to AAAR Happy with the decision of AAR CMA Pankaj Kannaujiya

Advance Ruling Cases The Authority of Advance Ruling (AAR) in Kerala had passed an advance ruling clarifying that GST would be applicable on payments made by an employee of a company towards canteen expenses. (The Advance ruling was requested by Caltech Polymers Private Limited, Kerala) The Authority of Advance Ruling ( AAR ), Kerala has ruled that, Implants for Joint Replacements attract 5% GST. (The Advance ruling was requested by Shri. Gopal Gireesh -A retail Dealer) The West Bengal Authority for Advanced Ruling recently ruled that the activity of “printing of photographs from media” is classifiable under SAC9989 and hence taxable at 12%. CMA Pankaj Kannaujiya

Advance Ruling Cases The Karnataka Advance Ruling Authority ( AAR ) has recently held that the sale of a going concern by a business house would not attract tax under the GST Regime. (The applicant, M/s Rajashri Foods Pvt Ltd ) The Authority of Advance Ruling ( AAR ) in Karnataka, on 21st March held that a statutory company cannot be treated as “Government” and therefore the benefit of concessional GST rate cannot be availed. The Delhi Authority for Advance Ruling recently held that the cleaning services provided to the Northern Railways are not exempted from GST CMA Pankaj Kannaujiya

THANK YOU Pankaj Kannaujiya Any questions FCMA, CIPFA(UK), M.com (Tax) Practicing Cost Accountant 304-21st Century Business Center, Ring Road, Surat 0261-4897877 Mob: +91 99985 30475 cmakannaujiya@gmail.com parametroadvisory@gmail.com www.cmapk.in @pankaj.kannaujiya.3 @kannaujiyapan @pankaj-kannaujiya