Advance Ruling Under GST

Are you planning on starting a business and are you confused with the vast tax provisions of the GST law that may be applicable to you? You may be having many questions whether your products or service are liable to tax under GST. If you need clarity on the GST matters specific to your case and if you are a taxpayer compliant with the GST laws, rest assured because there is a concept of Advance Ruling to your rescue.

What is Advance Ruling?

Advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
It is the written representation of GST laws given to an applicant on clarifications of certain tax matters.

Why is Advance Ruling Required?

  • • Provide certainty in tax liability in Advance in relation to an activity proposed to be undertaken by the applicant as the ruling is binding on the applicant
  • • Attract Foreign Direct Investment (FDI)
  • • Reduce litigation as applicants can be compliant with tax laws due to the Advance ruling
  • • Pronounce ruling expeditiously in a transparent and inexpensive manner.

On what matters can the Ruling be given?

  • • Classification of any goods or services or both
  • • Applicability of a notification issued under the provisions of CGST Act
  • • Determination of time and value of supply of goods or services or both
  • • Admissibility of input tax credit of tax paid or deemed to have been paid
  • • Determination of the liability to pay tax on any goods or services or both
  • • Whether applicant is required to be registered
  • • Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.

Can you appeal to any authority if aggrieved by the pronouncement of the Advance ruling?

Section 100(1) of the CGST Act, 2017 provides that the concerned officer, the jurisdictional officer or an applicant aggrieved by any advance ruling pronounced by the Authority for Advance Ruling, may appeal to the Appellate Authority. Thus Appellate’ decision is also an Advance ruling.

Is there any time period for applicability of Advance Ruling?

There is no fixed time period as per Law. However, advance ruling shall be binding till the period when the law, facts or circumstances supporting the original advance ruling have not changed.

Which Authority looks over the Advance Ruling?

Ruling given by the AAR & AAAR will be applicable only within the jurisdiction of the concerned state or union territory. Also, it is only limited to the person who has applied for such Ruling.

How to Apply?

Application to Advance Ruling has to be made in Form GST ARA-01 along with fees of Rs5000

What is the Procedure for Advance Ruling?


Law has brought the Advance Rulings to avoid disputes and ensure a transparent and timely procedure. It aims at providing clarity to the taxpayer with respect to the liability under the GST Act.

Disclaimer:“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”

Prepared By

Chaitra V

Date: 10/03/2020