Advance Ruling under GST

By Registrationwala

10th August 2017


An advance ruling is a decision passed by the authority or the appellant authority to an applicant on the matters related to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

Every person who is planning to undertake activities which are liable for the payment GST and is uncertain about the certain tax provisions can seek an advance ruling. An applicant can seek clarification regarding the tax matters in advance. The advance ruling is the simple procedure that assists the taxpayers in avoiding the long drawn and expensive litigation procedure.

Authority for Advance Ruling (AAR) is a legally constituted body that gives the decisions on the applications filed. The orders passed by them are binding upon both the applicant as well as the tax authority.

 The applicant is required to file the application seeking advance ruling before initiating the proposed activity.

Advantages of Advance Ruling

Following are the advantages of advance ruling mechanism-

1.    It provides the clarity to the taxpayers about their net tax liability before initiating a proposed activity.

2.    It helps to avoid long litigation process.

3.    Assists in attracting foreign direct investment

4.    It is an inexpensive and transparent procedure.

Matters which can be dealt by advance ruling

A taxpayer can seek clarity on the following matters through advance ruling-

(a)    Availability of input tax credit.

(b)    Whether the taxpayer is required to obtain GST registration or not.

(c)    Determination of time and value of supply of goods/services

(d)    Tax liability against any good or service

(e)    Whether any particular thing was done by the applicant regarding goods/services will result in a supply.

(f)    To determine the time and value of the supplies.

(g)    Classification of any kind of good or service under the Act.

The application filed shall be accompanied by the prescribed amount of fee.

Procedure for obtaining an advance ruling-


Any person who wants to obtain an advance ruling is required to file an application to the authority of advance ruling in the prescribed form and manner. The proper rules of the advance ruling shall be followed by him to make an application.


As soon as the application is received by the AAR it will send a copy of the application to the officer in whose jurisdiction the applicant falls and also he shall call for all relevant records.


After receiving the records the AAR will examine the application along with the records and also hear the applicant.


After a careful examination, the concerned tax officer may either accept the application or reject the application.

In case the tax officer rejects the application, then he must give proper reasons for it.

 If the application is admitted the Authority of Advance Ruling is required to pronounce its ruling within the ninety of receiving the application. Before giving the ruling the officer must examine all the records and facts very carefully.

Appeals against the order of AAR

Both the aggrieved applicant and concerned tax officer are empowered to make an appeal against the order passed by the authority of advance ruling to the appellant authority of advance ruling (AAAR).

The proper appeal  in the prescribed manner shall be filed within the 30 days from the receipt of the advance ruling.

The appellant authority must pass an order after hearing the appealing parties within 90 days from receiving the application. If the members of the AAAR differ at any point, then it shall be deemed that no advance ruling is issued in respect of the question under appeal.



Advance Ruling under GST