Context:
- The GST council has asked the Centre and states to expedite setting up of appellate authorities for aggrieved entities to appeal against orders of the authority for advance rulings (AAR).
- With AARs in different states started giving rulings since March, it has become imperative for the Centre as well as states to set up the appellate authority for advance ruling (AAAR). So far only 12 states, including West Bengal, Gujarat, Madhya Pradesh, Rajasthan, Tamil Nadu and Uttar Pradesh, have issued notifications for setting up AAARs. However, these have not become operational as the members have not yet been appointed.
About AAAR
- As per the state GST law, the appellate authority will have two members – the chief commissioner of central tax as designated by CBIC and the commissioner of state tax.
- The appellate authority has been mandated to pass order within 90 days of the filing of appeal.
- Under the GST (goods and services tax) law, an aggrieved party can file an appeal against the order of the authority for advance rulings within 30 days, which may be further extended by a month.
About Advance Ruling
Advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or subsection (1) of section 100 of the CGST Act, 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
The broad objectives for setting up a mechanism of Advance Ruling are:
- Provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant.
- Attract Foreign Direct Investment (FDI).
- Reduce litigation.
- Pronounce ruling expeditiously in a transparent and inexpensive manner.
Sourec:TH