The advance ruling system under the GST law is buzzing in the markets and got appreciations from many economists. This system allows taxpayers to approach the authority and seek clarifications regarding the decision provided by that authority to the taxpayer on matters specified in GST laws.
The advance ruling mechanism also provides certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant taxpayer.
The primary objective of the advance ruling is to reduce litigations and to attract foreign direct investment. An applicant can apply for advance ruling even before taking up a transaction (proposed supply of goods or services) or in respect of a supply which is being undertaken. This is not possible in existing tax regime in the country.
The government is also ready to undertake another set of rules dealing with the advance ruling in its proposed GST council meeting on May 18 and May 19.
This mechanism comes from the global best practices which would be much more useful in bringing down litigations and reducing post-assessment disputes. The move taken by the government is welcomed by many economists and market experts.
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