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Appellate Authority for Advance Ruling (AAAR) in GST
We are aware that various laws like Income Tax, Customs have the process Advance Ruling so as to get clarifications as to the applicability to the provisions of act. The decisions of Authority of Advance Ruling (AAR) are binding to the Authorities. Is similar kind of procedure available in Goods and Services Tax (GST)? The answer is yes similar kind of provision is available in GST. Even here, Council has put forth a new provision, the Appellate Authority for Advance Ruling (AAAR) to allow taxpayers to appeal rulings by the AAR.
Any taxpayer who files an application for clarification with the AAR and is not satisfied with the result can appeal to the AAAR, based on the provisions of Section 99 of the Central GST (CGST) Act of 2017.
The AAAR is constituted separately for each state and will have two members:
- The chief commissioner of central tax
- A state commissioner
Each state must appoint members to the AAAR separately, similar to the procedure for AAR. Delhi was the first state to appoint members, followed by Maharashtra.
Taxpayers unsatisfied with a ruling by the AAR must appeal to the AAAR within 30 days from the date the AAR order is communicated. This time limit may be extended by another 30 days if the AAAR finds the applicant was legitimately prevented from filing the appeal on time.
At this time, taxpayers must file applications for AAR, or appeal to AAAR, manually by submitting documents to the concerned jurisdictional office. Once the GST Network has stabilized, however, taxpayers will file applications online.
Fee for appealing with the AAAR
The application to appeal with the AAAR must be accompanied by a fee of Rs. 10,000 for CGST and another Rs. 10,000 for the respective state or union GST.
As per Section 101, Subsection 2, the AAAR shall rule on the appeal within 90 days from the date the application is filed. After considering arguments by the concerned parties, the AAAR will either upheld the AAR order, amend it, or modify it.
If AAAR officials cannot come to an agreement on any of the questions raised by the applicant in his/her appeal, no advance ruling will be issued. The AAR order will stand.
Amendment/rectification of advance ruling
Based on the provisions of Section 102 of the CGST Act, a ruling passed under the provisions of Section 101 can be rectified within six months from the date the ruling is passed. Rectification of the order can be done in one of three ways:
- By the AAAR
- By any officer of the department
- By the applicant
Applicability of the order passed by the AAAR
As per the provisions of Section 103 of the CGST Act, orders passed by the AAAR will only be applicable:
- To the applicant who has appealed
- In the state where the order is passed
- Until the time when there is a change in the act or any other related provisions under the act
- Until the circumstances under which the appeal is filed change
As per the provisions of Section 104 of the CGST Act, the order passed will be void where the applicant has obtained it in any of the following manners:
- By submission of wrong information
- Suppression of facts
- Misrepresentation of facts
In such a case, the applicant will be subject to the provisions of the act from the date the appeal was filed to the date it is withdrawn. The applicant will have an opportunity to prove his/her case before an order is passed.
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