Authority for Advance Rulings On Central Taxes Bill, 2007

At present, there are two Authorities for Advance Rulings, one constituted under section 245-O of the Income-tax Act, 1961, which has under section 24 of the Central Sales Tax Act, 1956, also been notified as the Central Sales Tax Appellate Authority, and the other constituted under section 28F of the Customs Act, 1962, which is also an Authority for Advance Rulings under the Central Excise Act, 1944 and  the Finance Act, 1994 for  purposes of Service Tax. These Authorities, called as "Authority for Advance Rulings (Income-tax)" and "Authority for Advance Rulings (Central Excise, Customs and Service Tax)", have been established to enable applicants to obtain, in advance, binding rulings from the said Authorities on issues which may arise in the determination of their tax liabilities.

2. While reviewing the performance of the said Authorities on Advance Rulings, it was noticed that these Authorities did not have adequate work to justify separate Authorities with separate establishments. A decision was, therefore, taken to constitute a common Authority for Advance Rulings for performing the functions of these Authorities. For this purpose, it is necessary to enact a separate legislation. Hence, the Authority for Advance Rulings on Central Taxes Bill, 2007, for constituting an Authority for Advance Rulings on Central Taxes.  Consequential amendments to the relevant provisions of the Income-tax Act, 1961, the Customs Act, 1962, the Central Excise Act, 1944, the Central Sales Tax  Act, 1956 and the Finance Act, 1994 are also sought to be done through the Bill.

3. The Bill seeks to achieve the above objects.

Authority for Advance Rulings consolidation aims to create a single body issuing binding advance rulings under central tax laws. Consolidation of separate advance-ruling bodies into a single Authority for Advance Rulings for central tax laws is proposed by the Authority for Advance Rulings on Central Taxes Bill, 2007, following a review that found inadequate workload for multiple Authorities; the Bill seeks to enact a standalone statute and make consequential amendments to the Income-tax, Customs, Central Excise, Central Sales Tax and Finance Acts so the new Authority can issue binding advance rulings on tax liability questions.