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1623053553 Advance Ruling
Indirect Taxation (IDT08)
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Advance Rulings
under GST
Tax Disputes inevitable. Two approaches- Dispute Resolution & Dispute Prevention. Advance ruling is a system of Dispute Prevention. Advantages are; *Certainty of tax position. *Planning activities accordingly. *Avoid Litigation *Attract FDI
“Advance Ruling” – Meaning &
its Advantages
Advance Ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Binding on both Assessee and Government Greater Tax Certainty Reduced Litigation Inexpensive Expeditious Greater Transparency
Authority for Advance Ruling Appellate Authority of Advance Ruling One member from the officers of Central Tax
- To be appointed by the Central Government Chief Commissioner of Central Tax as designated by the Board One member from the officers of Union Territory Tax/ State Tax – To be appointed by the Central Government/State Government Commissioner of Union Territory Tax/ State Tax having jurisdiction over the Applicant
Constitution of the Authority and Appellate
Authority
Both the Authority for Advance Ruling & the Appellate Authority for Advance Ruling are constituted under the respective State/Union Territory Act and not the Central Act. This means that the ruling given by the AAR & AAAR will be applicable only within the jurisdiction of the concerned state or union territory. Therefore, questions on determination of place of supply cannot be raised with the AAR or AAAR. The respective State Governments by notifications to constitute the Authority of Advance Ruling and Appellate Authority of Advance Ruling.
Questions on which Advance Ruling
can be sought
Can Advance ruling be sought on issues relating to place of supply? How many issues can be asked in a single AAR? Sutherland Mortgage Services INC Vs Principal Commissioner (Kerala High Court) Can recipient apply for AAR? What matters
Other notable aspects about advance
ruling
No advance ruling in case the issue is already pending or is decided (in applicant’s case) Both Authority and Appellate Authority shall grant hearing to the applicant while deciding the application. Members of Authority differ in opinion – reference to be made to Appellate Authority. Members of Appellate Authority differ - no advance ruling can be obtained. Time period for both Authority and Appellate Authority to pronounce the ruling – ninety days from date of receipt of application/appeal. Appeal can be filed within 30 days from the communication of the ruling which may be further extended by 30 days on sufficient cause being shown. Both Authority and Appellate Authority empowered to rectify an error, in the order, apparent on the face of record, within six months from the date of the order.
Disadvantages in the concept of advance
ruling
Applicant will have to obtain a ruling in each State it has its business operations. What if conflicting? Presence of Appellate Authority makes the complete process lengthier and may lead to a dead-end. In case of difference in opinion the whole process becomes redundant Issues relating to place of supply cannot be dealt-with by the Authority / Appellate Authority.
Comparison in the provisions of
advance ruling – Pre &Post GST
Particulars Pre – GST regime GST regime Certainty of Tax Position Distinct Advance Ruling mechanism for Central Tax Laws and State Tax Laws – thus, more conclusive position regarding the law Orders of Authority & Appellate Authority applicable only within the jurisdiction of the concerned state – Objective of uniformity of tax position continues to be a dream Expeditious Disposal No Appellate Authority – under the erstwhile regime. However, despite provisions for time bound disposal – Authority had often been unable to decide timely, for reasons such as vacancy of members, etc. Provisions for time bound disposal provided – however, our experience in the past do not allow us to be optimistic on this count. Provision of appeal means no immediate finality of the issue as is being envisaged. No judicial member in Authority or Appellate Authority The Bench included a retired High Court/ Supreme Court judge – ensuring the application of a judicial mind in deciding the matter Authority/Appellate Authority comprise of Revenue officers – No judicial member – Possibility of a revenue bias cannot be ruled out.
Procedure for Advance ruling – Sec 98
AAR Prescribed Officer / Jurisdictional CGST / SGST Officer Applicant Advance ruling on Question in Application within 90days Opportunity of Hearing If members differs, refer to Copy 1 3 2 Appellate Authority of Advance Ruling 1 No application shall be admitted if the same is already pending or decided in any proceedings under any provisions of GST Application admitted
Practical Aspects for Obtaining
Advance Ruling
S. No. Particulars Details Source 1 Prescribed form and Mode of filing GST ARA-01 to be filed online on GST Common Portal Rule 104 of the CGST Rules , 2017 2 Amount of fee to be paid Rs. 5,000/- under the CGST Rules, 2017. Further, Rs. 5,000/- shall be paid under the SGST Rules, 2017. Consequently, effective fee shall be Rs. 10,000/- 3 Mode of payment of fee Internet banking or credit/debit cards or NEFT or RTGS Section 49 of the CGST Act Circular no 25/25/2017 dtd 21.12 regarding manual filling.
####### Appeal to and Order of Appellate Authority –
####### Sec 100 and
Decide no ruling can be issued Prescribed Officer or CGST/SGST Officer Applicant AAAR -within 30 days of Communication of Ruling* -in Prescribed form with prescribed fees OR AAR Ruling Within 90 days Hearing + Decision *Note: Appellate Authority may allow further period of 30 days
####### Practical Aspects Relating to Appeal to the
####### Appellate Authority for Advance Ruling
S. No. Particulars Details Source 1 Prescribed form for filing an appeal to the Appellate Authority by an applicant GST ARA-02 to be filed online on GST Common Portal Rule 106(1) of the CGST Rules, 2017 2 Amount of fee to be paid for filing an appeal Rs,000/- to be paid under CGST Rules, 2017. Further, Rs. 10,000 is to paid under SGST Rules, 2017. Thus, effectively fee of Rs. 20,000/- is to be paid. 3 Mode of payment of fee Internet banking or credit/debit cards or NEFT or RTGS Section 49 of the CGST Act, 2017 4. Prescribed form for filling an appeal to Appellate Authority by an officer [Departmental Appeal] FORM ARA-03 to be filled on GST portal with no fee. Rule 106(2) of the CGST Rules, 2017
Applicability of Advance ruling –
Sec 103
Advance Ruling Binding on Applicant seeking AR as per section 97(2) Jurisdictional tax Authority UNLESS Law, Facts, Circumstances have changed
Ruling void ab initio – Sec 104
If AAR / AAAR finds ruling obtained by the applicant /appellant by fraud / misrepresentation / suppression of facts. By order declare advance ruling as void-ab-initio, after giving an opportunity of being heard Note:- All provisions of the Act shall apply after excluding period in between date of ruling and this order
1623053553 Advance Ruling
Course: Indirect Taxation (IDT08)
University: Institute of Chartered Accountants of India
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