Section 96 of GST – Authority for advance ruling

Section 96 of GST – Authority for advance ruling. Check all Details for GST Section 96. In this section you may find all details for “Authority for advance ruling” as per GST Act 2017Detailed Analysis of GST Section 96 of GST Act 2017. We Provide Complete Details for All GST Section’s and In this article you may find all details for GST Section 96.Check Section Wise Analysis of GST Act 2017, Chapter Wise Analysis of GST All Sections. in this article you may find complete details regarding Section 96 of GST Act 2017 –Authority for advance ruling, gst all sections and definitionsNow Check more details from below…..

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Section 96 of GST – Authority for advance ruling

Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory

Related Provisions of the Statute

Section or Rule Description
Section 95 of CGST Act Definitions
Rule 103 of CGST Rules Qualification and appointment of members of the Authority

Analysis of this section

Introduction

The Authority for advance ruling constituted under provisions of a State GST Act or UTGST Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory.

Analysis

The AAR shall be located in each State/Union Territory constituted under the provisions of State Goods and Services Tax Act and Union Territory Goods and Services tax Act. The Government shall appoint officers not below the rank of Joint Commissioner as member of the Authority for Advance Ruling.

As per Section 96 of the State GST Acts, the State Government may, on the recommendation of the Council, notify any AAR located in another State to act as the Authority for Advance Ruling for the State.

Further, the AAR shall consist of one member from amongst the officers of Central tax and one member from amongst the officers of State tax, to be appointed by the Central Government and the State Government respectively. The qualifications, method of appointment of the members and the terms and conditions of their services shall laid down in the SGST Rules.

As the AAR and the Appellate Authority have been instituted under the respective State / Union Territory Act and not the Central Act, the ruling given by the AAR and AAAR will be applicable only within the jurisdiction of the concerned Sate or union territory. Thus, an advance ruling in case of an applicant in Kerala cannot be made applicable to another division of the same company located in Karnataka. This has the potential to create a difficult situation where the jurisdictional officer of the division located in Karnataka may choose not to abide by the Advance Ruling issued by the Kerala AAR to another division of the same company in Karnataka. Similarly, a situation may also arise wherein the Authority for Advance Ruling in different States may conclude differently in respect of the same issue. Since the

advance ruling is binding on the concerned officer or the jurisdictional officer only in respect of the applicant, there is no assurance that the same officers may apply the interpretation flowing from the jurisdictional AAR in the same or different manner with respect to another registered person in the State. But there is no reason to be anxious as the aim of tax administration is ensure stability in the law and not create instability by deliberately misapplying interpretations on AARs.

It is important to note that the members of the AAR are appointed from among the executive Government officers in tax department, be it the CGST representative or the SGST representative. These officers who decide upon matters relating to taxability of a transaction, liability of the assessee, registration requirements and other matters stated in Section 97(2) ‘are themselves a creation of the system’.

Such is the nature of the constitution of the AAR or the Appellate Authority that the very same officers who have interpreted the law in favour of tax collections will now sit in judgement on matters of levy, taxability and liability. Hence before applying for an advance ruling, the applicant must appreciate the fact that the members of the AAR or the Appellate Authority or the National Appellate Authority cannot question the vires of the provisions of the GST law.

Key to securing accurate ruling, is to present the facts accurately and ask the right questions. The understanding about the business seems to cloud taxpayer’s mind so much that facts required to be appreciated by Authority are inaccurately presented. Care must be taken to avoid incomplete or inaccurate facts. Questions must be simply put instead of circuitous case study approach with ‘if-then’ alternatives.

Thus, it is important for an applicant to carefully consider before seeking an Advance Ruling however attractive a compelling the taxpayer’s interpretation may seem to be. Given that Section 103 states that an advance ruling shall have a binding effect on the applicant and the officers in respect of the applicant, the applicant should analyse the impact of an adverse ruling.

Comparative review

Under the erstwhile laws, there was only one AAR for three Central indirect tax laws i.e. Central Excise, Customs and Service Tax constituted by the Central Government under section 28F of the Customs Act, 1962 having its office in Delhi. Under the GST law, there will be one AAR in each State or Union Territory because the concept of advance ruling is being made applicable to SGST laws/ UTGST laws as well.

The composition of the AAR in the erstwhile law consisted of one judicial member as part of the authority. However, there are only two members in the GST AAR consisting of one member from the state and one from the centre, both being officers of the GST regime.

Frequently Asked Questions

Where will the office of AAR be situated?

The office of the AAR will be situated in each State/UT. However, the State Government, on the recommendation of the Council, may notify any AAR located in another State to act as the Authority for Advance Ruling for the State.

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