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Advance Ruling Under GST

December 22, 2021

Advanced Ruling Under GST

Advance Ruling under GST


The advance ruling is required as the new GST provisions require many clarifications for businesses.


What is meant by the advance ruling?


GST Advance ruling denotes a written clarification of tax laws. It is provided by tax authorities to corporations and individual taxpayers who demand clarity of specific tax laws. An advance ruling under GST is normally asked as the taxpayer feels confused regarding certain tax provisions and it is applied before starting the proposed procedures.


For instance, the advance ruling is at disposal in international taxation as per income tax. It is implemented with a view to helping non-residents to determine the income-tax liability, manage their income-tax in advance, and mitigate long-drawn and costly legal disputes. As per GST, the advance ruling is a written decision given by the tax authorities to an applicant on questions pertaining to the supply of goods/services.


Why is advance ruling under GST necessary?


The aim of any advance ruling under GST is:


  • Ensure certainty for tax liability in advance regarding a future activity to be undertaken by the applicant


  • Attract more Foreign Direct Investment (FDI) – By giving clarification on taxation and providing a clear picture of the future tax liability of the FDI. The clarity and clean taxation can attract non-residents who do not want to get embroiled in messy tax disputes.



  • Mitigate litigation and costly legal disputes


  • Offer decisions in a timely, transparent, and less costly manner.


When can one make a request for GST Advance Ruling?


Any taxpayer can make a request for an advance ruling under GST if he is ignorant about the provisions. Advance tax ruling is applicable on:


  • Classification of any goods and/or services under the GST Act


  • Applicability of a notification that affects the tax rate



  • Determination of time and value of supply of goods and services


  • Whether input tax credit paid (or deemed to be paid) will be allowed



  • Determination of the liability to make a tax payment on any goods/services 


  • Whether the applicant has to be registered under the GST 



  • Whether any particular thing done by the applicant pertaining to goods/services will result in a supply.  


Procedure on receipt of application


A request for advance ruling is first made to Authority for Advance Ruling (Authority). In case a person is unsatisfied with the advance ruling, he can appeal to the Appellate Authority for Advance Ruling (Appellate Authority).




Application for the Advance ruling should be made in Form GST ARA -01 along with a fee of Rs. 5,000.


The decision of the Authority


The Authority can by order, either admit or deny the application.


Will all applications be allowed for an advance ruling?


The application cannot be admitted by the advance ruling authority as-

  • The decision has already been made upon in the matter in an earlier case for the applicant.


  • The decision is already pending in the matter in any proceedings for the applicant



Besides, Advance Ruling is not possible in any pending case or any decision already made.

Applications would be rejected only after being given an opportunity of hearing. Reasons for rejection shall be given in written form.


When will the authority pronounce their decision?


The decision on the Advance ruling will be given within 90 days since the submission of the application. In case the members of the advance ruling authority differ in opinion on any point, it will be referred to the appellate authority.

It is to be noted that the Advance Ruling will have a prospective effect only.


On whom will the advance ruling be applicable?

The advance ruling would be applicable for only – (a) On the applicant  (b) On the jurisdictional tax authorities in respect of the applicant. If the law, facts of the original advance ruling are modified then the advance ruling would not be applicable.


Appeal to the Appellate Authority

If you are confused about the tax rules you can ask for an advance ruling. Even if you are not satisfied with the ruling you have an option to approach appellate authority.










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