eJournal Sept 2021 Volume 6 - Flipbook - Page 11
Earlier, it was only w.r.t business transactions which were proposed
This is a significant departure from the set up in the earlier regimes
to be undertaken that an advanced ruling could be applied for or
wherein, only a single advance ruling authority was present. Due to
only a certain class of taxpayers could apply for a ruling. But now,
this, there are divergent interpretations for the same legal
in the GST regime, a taxpayer whether or not registered, can apply
provision by different State AARs leading to challenges for
for a ruling seeking clarification with respect to even its ongoing
businesses to gain clarity and adhere to the law. The AAR and the
business activities as well as proposed business transactions.
AAAR consists of an officer each from Central and State Tax. The
Self-assessment is the preferred architype of any taxing statute.
With the onus put on taxpayers to assess and pay taxes, advance
ruling systems provide the required facility to the taxpayers and
clarity on how tax would apply to their transactions.
presence of only officials from the tax department with no
members having judicial experience drags down the purpose of
having the advance ruling mechanism - as the prorevenue bias is
quite evident in the decisions. To address these conflicting
decisions taken by the various State AARs/AAARs and also to
Since the implementation of GST law in India is relatively new and
eliminate the revenue bias, the GST Council notified the creation of
uncertain, there has been a brisk inflow of applications seeking
a central appellate authority known as the National Appellate
clarifications on the applicability of the provisions of the law.
Authority for Advance Ruling (NAAAR), with a member having
The legal framework for the advance ruling mechanism is
judicial experience. Enabling provisions have been inserted into the
contained in Chapter XVII of the Central Goods and Services Tax
GST law since 2019 but the same are yet to be notified, making it a
laws.
toothless provision without a judicial blessing.
The advance ruling mechanism is uniquely set up in India with the
Authority for Advance Ruling (AAR) and the Appellate Authority for
Advance Ruling (AAAR) set up in each State/Union Territory
through the respective State GST laws.
ADVANCED RULING - GST
Shrinath Ranganathan - CA
