India is moving towards improved ease of doing business and after the implementation of GST. However, it may take time for all the small traders and other people in business to comply with constantly changing norms of GST.

This is exactly why there is a provision to seek clearance on any tax rule that you need to be addressed. One such method that individuals may adopt regarding specific issues is the Advance Ruling which essentially involves detailing out the decision of the authority on particular query posted by an individual related to goods and services.

The entire mechanism is governed by AAR i.e. Advance Ruling Authority which consists of 1 member from CGST council and 1 from the SGST/UTGST council appointed by respective governments to provide an expert insight and give answers to the applicant. Before the starting of the activity, you must make an application for the advance ruling to the AAR. The form GST ARA-01 is used for making the application and you need to make a payment of Rs.5000.

Now the application may or may not be rejected by the authority depending on whether the same query has been decided earlier by the same applicant and if the same issue is pending for the applicant. However, an opportunity for hearing will be given before closing the matter.

Other Important Details

The advance ruling system of GST dictates that the authority will give the decision on the application within 90 days from the date of applying as perSection 98(6) of CGST/SGST Act.

Advance Ruling provision is made to facilitate certainty for tax liability in advance if the applicant wants to conduct a specific activity in future. It is also done to attract foreign direct investment (FDI) because a clean and healthy tax system helps foreign investors to understand the rulings better and make investments. It also helps to reduce the litigation and eliminate legal disputes in future. It essentially gives you a timely, transparent and sound decision so that you can carry forward your economic activity with ease.

The Advance Ruling although requires an application fee of Rs.5000 but makes your future business activity legally safe in case you are confused about certain rulings of the GST. Individuals must use this feature for the better conduct of business.

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