GST AMENDMENT: GOVERNMENT TO REVAMP AAR MECHANISM

[Asked by Guest]

The Goods and Service Tax Council has planned to make it mandatory for the Authority for Advance Rulings (AAR) to be manned by senior revenue officials. An AAR is a quasi-judicial body. The rulings bring certainty in determining tax liability that is binding on both the applicant as well as the Government Authorities. The advance ruling is inexpensive, simple and expeditious.

The Government proposed the idea to revamp the AAR by establishing either a centralized authority or four regional authorities. The aim is to avoid contradicting and condescending AAR rulings by different benches and to ensure orders based on legal principles. Some sources said that the GST Council might recommend to set up a central body that would adjudicate on conflicting ruling from AARs based in two different States. They opine that a centralized AAR would break the logjam in many cases.

According to the Goods and Services Tax (GST) Law, each state is required to set up AAR comprising one member from the Central Tax Department and the other from their respective States. Hence, several states were notified to form AARs based on Section 96 of the Respective State GST Act.

“However, AARs might continue to function without former judicial officers. It will be different from its precursor taxes – excise and service tax – that was headed by retired Supreme Court Judges along with two technical members.” – The officials said.

Further information, you can hire a GST Consultant in Chennai or look into our GST Portal.

[YAGAY and SUN]

Thanks for the information.

AI Summary

Authority for Advance Rulings revamp proposed to centralize benches to prevent conflicting advance rulings and ensure legal consistency.
The document reports a proposal to reform the Authority for Advance Rulings under GST by mandating senior revenue officials on AAR benches and by creating either a centralized national AAR or regional AARs to resolve conflicting State-level rulings and ensure uniform legal principles, while noting current statutory composition requires one Central tax member and one State member under section 96 of respective State GST Acts.