Library / Goods and Services Tax: The Professional's Master Guide

38. Advance Rulings (Sections 95 to 106)

An advance ruling is a binding answer from a statutory authority on a question about a supply that the applicant is making or proposes to make. It gives certainty before the transaction, rather than a dispute after it. Each State has an Authority for Advance Ruling (AAR) with one Central and one State member, and an Appellate Authority (AAAR).

38.1 Who Can Apply and What Can Be Asked

Any registered person, or a person who wants to register, may apply in ARA-01 with a fee of Rs. 5,000 under CGST and Rs. 5,000 under SGST. Section 97(2) limits the questions to:

classification of goods or services;
applicability of a notification;
determination of time and value of supply;
admissibility of input tax credit;
liability to pay tax on goods or services;
whether the applicant must register; and
whether a transaction amounts to a supply.

Place of supply is not in the list. AARs have consistently refused to answer whether a supply is inter-State or intra-State, or whether it is an export. The question must relate to the applicant's own supply; a recipient cannot ask about the supplier's tax.

38.2 Procedure and Time Limits

Stage	Time limit	Reference
AAR ruling	Within 90 days of receipt of application	Section 98(6)
Appeal to AAAR	Within 30 days of communication, plus 30 days on sufficient cause; fee Rs. 10,000 each	Section 100, ARA-02
AAAR ruling	Within 90 days of filing appeal	Section 101(2)
Members of AAR differ	Question referred to AAAR	Section 98(5)
Members of AAAR differ	No ruling on that question	Section 101(3)

The AAR must reject the application where the question is already pending or decided in any proceedings in the applicant's case under the Act (proviso to section 98(2)). A scrutiny notice or show cause notice on the same issue is usually fatal, so apply before the issue reaches the department.

Illustration 188: Advance ruling timeline

Deshmukh Foods Pvt. Ltd. filed ARA-01 on 12 January 2026 asking whether its ready-to-eat parathas are covered by the nil entry for Indian breads. Fee: Rs. 5,000 + Rs. 5,000 = Rs. 10,000.

Step 1: The ruling is due within 90 days, by 12 April 2026.

Step 2: The ruling, against the company, was communicated on 20 April 2026. Appeal to AAAR lies by 20 May 2026, and with condonation up to 19 June 2026. Fee: Rs. 10,000 + Rs. 10,000 = Rs. 20,000.

38.3 Effect of a Ruling (Sections 103 and 104)

A ruling binds only the applicant and the jurisdictional officer in respect of the applicant (section 103). It binds until the law or facts on which it was based change. It does not bind other taxpayers, other officers, or the same company's registrations in other States, because each GSTIN is a distinct person. Under section 104, a ruling obtained by fraud, suppression of material facts or misrepresentation can be declared void from the beginning, after hearing the applicant.

Illustration 189: Reach of a ruling

Kavya Home Appliances has registrations in Gujarat and Maharashtra. The Gujarat AAR ruled that a service bundled with its water purifiers is a composite supply taxed at the rate of the purifier.

The ruling binds the Gujarat registration and its jurisdictional officer. The Maharashtra registration is a distinct person. It may follow the ruling at its own risk, or seek its own ruling from the Maharashtra AAR, which may take a different view.

Judicial view: Challenging an advance ruling

Columbia Sportswear Co. v. Director of Income Tax (Supreme Court, 2012): An advance ruling authority exercises judicial power, and its ruling can be challenged in a writ petition before the High Court under Articles 226 and 227. The ruling was under the Income-tax Act, but the principle is applied to GST rulings, where the AAAR's order is final under the Act and the writ court is the only remedy.

38.4 Conflicting Rulings and the National Appellate Authority

Because each State has its own AAR, rulings on the same question often conflict. Sections 101A to 101C, inserted in 2019, provide for a National Appellate Authority for Advance Ruling to resolve conflicts between AAAR rulings of different States, but it has not been constituted. The Finance Act, 2026 inserted section 101A(1A), in force from 1 April 2026, which allows the Government to authorise an existing authority, including the GSTAT, to hear such appeals until the national authority is set up. Check whether a notification has been issued before filing such an appeal.

Practice note

Draft the facts precisely: the product or service, contracts, invoices, flow of goods and money. The ruling is only as good as the facts stated.

Frame each question within one clause of section 97(2) and state the applicant's own interpretation with reasons and case law.

Check earlier rulings of all States on the question; attach contrary rulings and distinguish them.

Confirm that no notice on the issue is pending, and consider whether an adverse ruling would hurt more than uncertainty.

Chapter summary

• Advance rulings give binding answers on seven types of questions listed in section 97(2); place of supply is not one of them.

• Application in ARA-01 with Rs. 5,000 fee each under CGST and SGST; ruling within 90 days; appeal to AAAR within 30 days (plus 30).

• The AAR must reject a question already pending or decided in the applicant's own proceedings.

• A ruling binds only the applicant and its jurisdictional officer; other GSTINs of the same entity are distinct persons.

• A ruling obtained by fraud or suppression is void under section 104; writ is the remedy against an AAAR ruling.

• The national appellate authority is not constituted; section 101A(1A) permits an interim authority from 1 April 2026.