GST Act 2017: Section 103 of GST Act 2017 – Applicability of advance ruling. Check out details for GST Section 103 as per CGST Act 2017. Complete Analysis of GST Section 103, Section 103 of GST provide details for Applicability of advance ruling.
Section 103 of GST – Applicability of advance ruling
(1) The advance ruling pronounced by the Authority or, the Appellate Authority under this chapter shall be binding only –
- (a) on the applicant who had sought it in respect of any matter referred to in subsection (2) of section 97 for advance ruling;
- (b) on the concerned officer or jurisdictional officer in respect of the applicant.
The advance ruling pronounced by the National Appellate Authority under this Chapter shall be binding on—
(a) the applicants, being distinct persons, who had sought the ruling under subsection (1) of section 101B and all registered persons having the same Permanent Account Number issued under the Income-tax Act, 1961;
(b) the concerned officers and the jurisdictional officers in respect of the applicants referred to in clause (a) and the registered persons having the same Permanent Account Number issued under the Income-tax Act, 1961]
(2) The advance ruling referred to in sub-section (1) 14[and sub-section (1A)] shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed.
Related Provisions of the Statute
|Section or Rule||Description|
|Section 97||Application for Advance Ruling|
Analysis and Updates
This provision specifies the persons to whom the Advance Ruling will apply and the period for which the Advance Ruling shall stay in effect.
(i) The advance ruling pronounced by the Authority under this chapter shall be binding only on the applicant and on the jurisdictional officer in respect of the applicant. It is important to note the advance ruling is GSTIN specific. That is to say, the advance ruling obtained by an applicant would not be applicable to other distinct persons of such applicant. As such, it may be advisable to make the application for advance ruling by a distinct person, other than the distinct person who is desirous of undertaking such activity as because the person making the application shall be bound by the advance ruling and not the other distinct person. However, advance ruling pronounced by National Appellate Authority shall be binding on all registered persons having the same Permanent Account Number issued under the Income-tax Act, 1961.
(ii) Therefore, an applicant/appellant does not have an option but to abide by the advance ruling that he had applied for, except approaching a higher court through a writ petition.
(iii) The advance ruling shall be binding on the said person/authority unless there is a change in law or facts or circumstances, on the basis of which the advance ruling has been pronounced. When any change occurs in such laws, facts or circumstances, the advance ruling shall no longer remain binding on such person.
(iv) Although an advance ruling may not be binding on persons other than the applicant or the appellant, it does throw light on the manner in which the law is being understood and interpreted. Other assessees could draw inferences from the advance rulings.
(v) The above provision which seeks to bind only the applicant to the advance ruling could be misused by which applications for advance rulings are filed through a proxy carrying on business with the same/similar business model or issues. This would help gauge the interpretation of the revenue officers without having to be bound by the ruling.
Issues and Concerns
- An advance ruling would be in effect only till such time that the law, facts of the case or circumstances on which the original advance ruling was based, remains unchanged. One has to consider if Circulars issued by the CBIC subsequent to an advance ruling can be considered to be a change in law, as may be contended by the proper officers. In my opinion, circulars do not have any legal authority, as such issue of circulars cannot be termed as change in law.
The provision is similar to the Advance Rulings provisions in erstwhile Central Indirect Tax laws as contained in section 23E of Central Excise Act, section 28J of Customs Act and section 96E of the Finance Act, 1994.
Frequently Asked Questions
Is the advance ruling binding on other assessee?
Advance Ruling is applicable on the applicants, and all registered persons having the same Permanent Account Number issued under the Income-tax Act, 1961.
Are the tax authorities bound by the advance ruling?
Only the jurisdictional officer/concerned officer, in respect of applicant who has sought advance ruling, are bound by the advance ruling.
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