GST Advance Ruling — AAR / AAAR

Sections 95-101 CGST Act 2017: an advance ruling is a binding decision by the Authority for Advance Rulings (AAR) on specific GST questions before a transaction occurs. It covers: HSN/SAC classification, applicable rate, ITC admissibility, time and place of supply, registration liability, and whether a supply is zero-rated or exempt. Binding only on the applicant and the jurisdictional officer — not on other taxpayers with identical facts.

Any registered person or a person seeking registration can apply on Form GST ARA-01 under Rule 104 of CGST Rules 2017. Fee: Rs 5,000 (Rs 2,500 CGST + Rs 2,500 SGST per the respective State GST Act). Applications must state a precise legal question — vague or multi-issue drafts are routinely rejected at admission. If the question is already pending in litigation or under audit, Section 98(2) bars the AAR from admitting it. The AAR must pronounce its ruling within 90 days of the application date under Section 98(6).

Under Section 103 CGST Act, the ruling binds the applicant and the jurisdictional Commissioner for the exact supply and facts stated. Either party may appeal to the Appellate Authority for Advance Rulings (AAAR) within 30 days under Section 100. AAAR orders are challengeable before the High Court under Article 226 of the Constitution — there is no statutory GST appellate tier above AAAR. A ruling lapses if the law changes or the applicant misrepresents facts (Section 104).

Apply for an advance ruling when a transaction is high-value, recurring, or falls in a genuine classification grey area — the ruling gives regulatory certainty and eliminates penalty risk under Section 122 CGST Act. Drawback: 90-day wait; state-specific; void on law or fact change. A written legal opinion is faster and portable across states but is not binding on GST officers. For import-related classification disputes, also consider a Customs advance ruling under Section 28-H of the Customs Act 1962, which is a separate proceeding.

State AARs and AARs of one state do not bind another — conflicting rulings on identical transactions (e.g., classification of software as goods vs. services, or composite vs. mixed supply) are common and unresolved at the AAR level. The AAAR of one state cannot override another. The only authoritative resolution short of High Court litigation is a CBIC Circular issued under Section 168(1) CGST Act — Circulars are binding on all officers and applicants and override prior AAR orders for prospective transactions. If you operate across multiple states, identify the state with the most favourable ruling track record before choosing where to file Form GST ARA-01.