Applying for an Advance Ruling

A business that is unsure how GST applies to something it does, or plans to do, has two choices. It can take a view and wait to see whether an audit or a notice challenges that view years later, with interest running. Or it can ask in advance. The advance ruling is the statutory way of asking. It gives a binding answer on a defined set of questions, from an authority outside the assessment chain, usually before any dispute exists. The answer binds only the business that asked and its own tax officers. It is also lost if the question has already reached the officers in any other form.

This guide covers Chapter XVII of the CGST Act, sections 95 to 106, and rules 104 to 107A of the CGST Rules. Appeals against a ruling are in Appealing an Advance Ruling.

The Authority sits in each State

There is no national Authority for Advance Ruling. Section 96 provides that the Authority “constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory”. The State Acts follow a common model. Section 96(2) of the Punjab GST Act, for example, provides that the Authority consists of “one member from amongst the officers of central tax” and “one member from amongst the officers of State tax”. Under rule 103, members are officers “not below the rank of Joint Commissioner”. The same Punjab section lets a State notify an Authority located in another State to act for it.

A business registered in several States therefore applies to the Authority of the State where the registration concerned sits. A ruling in one State does not answer the question for the same business’s registration in another. That limitation is the reason for the National Appellate Authority provisions, discussed in the next guide.

Who may apply

Section 95© defines “applicant” as “any person registered or desirous of obtaining registration under this Act”. An unregistered person may therefore apply, typically to ask whether registration is needed at all. Section 95(a) confines the ruling to questions “in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant”. A proposed transaction qualifies. A hypothetical question, or one about some other person’s supply, does not.

Whether a recipient can ask about the tax on what it receives has been disputed. In Anmol Industries Ltd v West Bengal Authority for Advance Ruling (Calcutta High Court, Division Bench, M.A.T. 630 of 2023, 21 April 2023), the Authority had rejected the application of a registered recipient of services for want of locus standi. The recipient had asked whether an exemption notification applied to the services. The Court held that the recipients “clearly fall within the definition of ‘applicant’ as defined under Section 95©”, and that the question fell under section 97(2)(b). It directed the Authority to decide the application on merits. The Court added that its direction was issued “considering the facts and circumstances of the case on hand”.

The seven questions

Section 97(2) limits the questions to seven:

1. classification of any goods or services or both
2. applicability of a notification issued under the Act
3. determination of time and value of supply
4. admissibility of input tax credit of tax paid or deemed to have been paid
5. determination of the liability to pay tax on any goods or services or both
6. whether the applicant is required to be registered
7. whether any particular thing done by the applicant amounts to or results in a supply

Place of supply is not on the list. Questions on place of supply, and therefore on whether IGST or CGST and SGST applies, fall outside the CGST Act’s list. FORM GST ARA-01 repeats the same seven heads as tick-boxes, and an application must fit at least one of them.

The bar: a question already pending or decided

The first proviso to section 98(2) provides that the Authority “shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act”. ARA-01 carries a declaration, at item 17, that the question is not already pending, and not already decided, in any proceedings in the applicant’s case.

Two limits on the bar come from the words themselves. It concerns proceedings “in the case of an applicant”, not proceedings against other people on the same issue. And it concerns the question raised, not unrelated matters.

What counts as “proceedings” was decided in Srico Projects Pvt Ltd v Telangana State Authority for Advance Ruling (Telangana High Court, Division Bench, W.P. No. 26145 of 2022, 17 August 2022). A works contractor applied on 11 May 2019 for a ruling on the rate applicable to its works for a central government housing body. That body was paying tax at 12 per cent, and the contractor considered 18 per cent correct. The Authority heard the matter only in April 2022. By then the DGGI had begun an inquiry, issued a notice on 15 December 2021 and summoned the managing director. The Authority rejected the application under the proviso. The Court held that “inquiry or investigation would not come within the ambit of the word ‘proceedings’”. It also held that a notice issued “much after filing of the application” could not be a bar. It set the rejection aside and directed a ruling on merits within two months. The word “already” in the proviso points the same way: what matters is whether the question was pending or decided when the application was made.

What to have ready

• The question, framed under one of the seven heads in section 97(2). The applicant writes it.
• A statement of the relevant facts and the applicant’s interpretation of law, items 15 and 16 of ARA-01. The portal’s manual says these go into a Word template downloaded from the form, converted to PDF and uploaded.
• Contracts, invoices, drawings, product literature or other documents the facts rest on. The portal’s FAQ allows four supporting documents of up to 5 MB each. The rest can be handed over in hard copy or produced at the hearing.
• Details of the jurisdictional authority, from the registration certificate.
• The fee, in the electronic cash ledger.
• A DSC for a company or LLP. The manual says DSC is mandatory for them. Other applicants may sign by EVC.

The fee

Rule 104(1) requires a fee of “five thousand rupees, to be deposited in the manner specified in section 49”. That is the fee under the CGST Act. CBIC’s Circular No. 25/25/2017-GST para 4 describes “the payment of the fee of Rs. 5,000/- each under the CGST and the respective SGST Act”, which comes to Rs 10,000 in all. The portal’s FAQ lists a deposit in the electronic cash ledger as a pre-condition. The fee sits under the “Fee” head, and is debited automatically when the application is filed.

Filing ARA-01 on the portal

The portal’s user manual and FAQ describe these steps for a registered applicant:

1. The applicant logs in and goes to Services > User Services > My Applications, and selects “Advance Ruling” as the application type.
2. If the cash ledger lacks the fee, the portal offers a deposit. Otherwise the applicant creates the application.
3. The applicant fills in ARA-01. This covers the nature of the activity, the issue heads ticked, the question, and the declaration about pending or decided proceedings. The applicant uploads the template and the supporting documents.
4. The application is verified and signed by DSC, e-signature or EVC. Rule 104(2) requires signature “in the manner specified in rule 26”. The fee is debited and an ARN issues.

An unregistered applicant follows a separate route. Circular No. 25/25/2017-GST para 4 describes generating a temporary user ID for advance ruling under User Services, using an email address and mobile number, and paying the fee against it. The portal’s manual describes the unregistered applicant’s procedure separately. Rule 107A also permits manual filing. The circular requires a manual ARA-01 to be filed in quadruplicate, with the fee still paid online.

What happens next

The Authority sends a copy to the concerned officer and may call for records (section 98(1)). It then hears the applicant and the officer, and admits or rejects the application by order (section 98(2)). A rejection requires a hearing first, and the reasons must be stated. The portal’s FAQ says the ARN status moves from “Submitted” to “Admitted” or “Rejected”, and that only one reply can be filed to each notice.

Once admitted, the Authority examines further material, hears both sides again, and “pronounce[s] its advance ruling on the question specified in the application” (section 98(4)). Section 98(6) requires the ruling “in writing within ninety days from the date of receipt of application”. The section attaches no consequence to delay. In Srico Projects the ruling had still not been given three years after the application. The ruling is signed by the members and certified under rule 105. It is sent to the applicant, the concerned officer and the jurisdictional officer.

If the two members disagree, they “state the point or points on which they differ and make a reference to the Appellate Authority” (section 98(5)). The portal describes a partial reference, where a ruling issues on the agreed points and the rest goes to the Appellate Authority.

What the ruling binds, and for how long

Section 103(1) makes the ruling “binding only” on the applicant who sought it, and on “the concerned officer or the jurisdictional officer in respect of the applicant”. Under section 103(2), it stays binding “unless the law, facts or circumstances supporting the original advance ruling have changed”.

The limitation works in both directions. In Bangalore Metro Rail Corporation Ltd v Karnataka Appellate Authority for Advance Ruling (Karnataka High Court, Division Bench, W.P. No. 192 of 2022, 7 July 2026), BEML had obtained a ruling on the classification of rail cars it supplied to the Metro. On the department’s appeal, the Appellate Authority reclassified parts of the supply at higher rates. The Metro was contractually bound to reimburse BEML’s GST, and it challenged the appellate ruling by writ. The Court dismissed the petition. It held that section 103 leaves “no scope to bind third parties” and “no scope for a challenge at the instance of any person other than the applicant or the concerned officer”. It noted contrary indications in earlier decisions of the Madras and Calcutta High Courts, which had not considered section 103. It followed the Madras High Court’s later view that a ruling is a decision in personam.

A ruling does not bind other taxpayers, and it does not bind the department in their cases. Another business’s ruling may show how an Authority reasons, but it settles nothing for anyone else.

When a ruling is void

Under section 104, if the Authority or the Appellate Authority finds that a ruling “has been obtained by the applicant or the appellant by fraud or suppression of material facts or misrepresentation of facts”, it may declare it “void ab-initio”. The Act then applies “as if such advance ruling had never been made”. A hearing is required first. The Explanation protects the department’s limitation. The period from the ruling to the order declaring it void is excluded in computing the time limits in sections 73, 74 and 74A. The portal’s FAQ says only members of the Authority can start void proceedings.

The facts stated in ARA-01, and the declaration at item 17, are therefore what the ruling stands on. A ruling given on an incomplete account of the facts protects nothing.

Putting a ruling right

Section 102 allows the Authority to amend its order “so as to rectify any error apparent on the face of the record”. It may act on an error it notices itself, or on one brought to its notice by the applicant or the officers, “within a period of six months from the date of the order”. A rectification that enhances tax or reduces credit requires a hearing first. The portal’s FAQ says a rectification application is filed from the ORDERS tab. The FAQ also gives it as the portal route after an application is rejected, since the portal does not allow an appeal against a rejection.

An adverse ruling on merits is appealed under section 100, within thirty days.

The procedure in order

1. Frame the question under one of the seven heads in section 97(2). It must concern the applicant’s own actual or proposed supply.
2. Check that the question is not already pending or decided in any proceedings in the applicant’s own case.
3. Deposit the fee in the cash ledger: Rs 5,000 under the CGST Act and Rs 5,000 under the State Act.
4. File ARA-01 under My Applications, with the facts, the interpretation and the documents. Sign by DSC or EVC, as the applicant’s constitution requires.
5. Attend the admission hearing, and then the hearing on merits. Reply to each notice once, and produce any further documents at the hearing.
6. Read the ruling for errors apparent on the record, which can be rectified within six months. Read it on merits too, because an appeal must be filed within thirty days of communication.
7. Apply the ruling only to the applicant’s own registration, and only while the law and facts it rests on remain unchanged.

The next guide covers appeals against a ruling: ARA-02 and ARA-03, the Appellate Authority’s ninety days, the effect of a split, and the National Appellate Authority.