India: Authority for Advance Rulings under GST

The onset of GST in India has brought much hope among corporate denizens, but at the same time there are a number of gray areas emerging as the implementation has taken effect.

Since clarity in the tax regime shall be the bedrock any entrepreneur deserves and needs, we warmly hope this article will provide a bird’s eye view on one of the most important aspects of GST.

According to the GST laws and regulations, any assessee can seek clarification on specific matters or questions relating to the supply of goods or services (or both) from the Appellate Authority for Advance Rulings (hereinafter referred as “AAAR”).

The new law also provides for an AAAR to deliberate over matters which have been deemed not determinable by the AAAR before or to adjudicate those advance rulings over which the applicant or other interested person is aggrieved.

In a major change, the definition of ‘advance ruling’ allows rulings in respect of even those supplies which are already being undertaken.

The exhaustive list on which advance ruling can be taken, however, does not include issues like nature of tax, export and import matters, determination of location of the supplier, etc.

Regarding provisions about processing of application, time limits, appeal mechanism, and binding nature of the rulings, we do believe that laws have provided for a seemingly approachable mechanism to mitigate tax prosecution and to foster higher compliance.

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