Quick Summary
Advance Ruling provides clarity on tax treatment of proposed transactions. It is binding on the applicant and tax authorities, reducing future disputes.
Advance Ruling is a written decision by tax authority on questions of tax liability for proposed transactions or activities.
Types of Advance Ruling
- Income Tax: Before Authority for Advance Rulings (AAR)
- GST: Before Authority for Advance Ruling (AAR)
- Customs: Before Customs Authority
- Central Excise: Before CESTAT (now merged with GST)
Who Can Apply
- Non-residents
- Resident with proposed transaction involving non-resident
- Public sector companies
- Specified resident applicants for GST
Process
- File application in prescribed form
- Pay application fee (₹10,000 for GST)
- Authority examines application
- Opportunity of hearing
- Ruling issued within 90 days
Binding Nature
Advance ruling is binding on the applicant and the tax authorities. Valid until there is change in law or facts.
Key Points
- Binding decision on tax liability
- Available for income tax and GST
- Reduces future disputes
- Valid until law/facts change
- 90-day timeline for ruling
- Application fee required