April 24, 2017 In Uncategorized




India is creating a liberal mechanism that would allow all taxpayers to determine their liabilities beforehand. It is planning a significant shift towards a litigation free environment under the GST regime.

The advance ruling mechanism will allow all categories of taxpayers to approach the authority, unlike the existing system that restricts the facility to proposed transactions before the start of a business.

The advance ruling infrastructure will also ensure that every commissionerate has an authority, with a joint commissioner level officer as a member. This is modeled after global best practices in which advance ruling is treated as a revenue function, and carried out directly by revenue authorities without being passed on to any quasi – judicial entity.

At present, advance ruling can be sought for customs, excise duty and service tax for any proposed transaction. It cannot be sought for any existing transaction for central taxes, although the state value added tax regime permits even existing transactions.

This move is the first step toward bringing down litigation.

Advance ruling norms provide that an application for advance ruling or appeal has to be filed online, with fees of Rs. 5,000 or Rs. 10,000 respectively.

The Government has released another set of rules dealing with advance ruling, and those deals with accounts, record, appeals and revision. The proposed GST Council meeting on May 18-19 will take up the final set of rules.

Rules for accounts and records propose to make mandatory the maintenance of separate accounts and records for each activity, including manufacturing, trading and provision of services.

The Government proposes to roll out the new tax regime, which seeks to replace multiple state and central taxes with a single levy, on July 2017.


Sanchayeeta Das

Legal Associate

The Indian Lawyer

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