Advance ruling strategy: Sections 97 to 106 in practice
A voluntary submission to a tax authority. Worth doing, occasionally, and only with the facts fully in hand.
An application for an advance ruling may be made under Section 97 on the questions specified, including classification, applicability of a notification, determination of time and value of supply, admissibility of input tax credit, liability to pay tax, requirement of registration, and whether a particular activity amounts to a supply. The Authority must decide within ninety days, an appeal lies to the Appellate Authority under Section 100, and a ruling is binding under Section 103 and void under Section 104 if obtained by fraud or suppression.
The questions you may ask
Classification of goods or services. Applicability of a notification issued under the Act. Determination of time and value of supply. Admissibility of input tax credit paid or deemed to have been paid.
Determination of the liability to pay tax on any goods or services. Whether the applicant is required to be registered. Whether any particular thing done amounts to or results in a supply.
The list is exhaustive. A question outside it — for example the correctness of a computation, or a factual dispute about whether a supply occurred — cannot be entertained.
The question must relate to a transaction being undertaken or proposed. A ruling is not available on a concluded dispute.
The strategic calculation
The upside is certainty for a material new arrangement, and protection against penalty and the extended period even if the ruling is unfavourable, because the position will have been disclosed.
The downside is that an unfavourable ruling binds you and is public. It will be cited against you and against your industry, and it forecloses the argument for the transaction ruled on.
The decision therefore turns on the strength of the position and the size of the exposure. A strong position with a large exposure is a good candidate. A weak position with a large exposure is not.
An industry association route, where a common question is taken by one member with the facts carefully chosen, is often better than each member applying separately.
Drafting the application
State the facts completely and accurately. A ruling obtained by suppression is void under Section 104, and the suppression becomes the department's case on the merits as well.
Frame the question narrowly. A broad question invites a broad answer, and a broad adverse answer is far more damaging than a narrow one.
Annex the contract, the specification and the technical material. The Authority decides on the material before it and will not assume facts.
Address the competing view in the application. An application that ignores the obvious counterargument gets an adverse ruling that adopts it.
Appear at the hearing with a written submission. These matters are decided quickly and on the papers.
What to do on Monday
Assess the strength of the position and the exposure before applying; a weak position should not be volunteered.
Frame the question narrowly and state the facts completely.
Annex the contract and the technical material, and address the counterargument in the application.
Consider an association route where the question is common to an industry.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
How long does a ruling take?
The Authority is required to pronounce within ninety days of receipt of the application. In practice the timeline varies by state.
Can we withdraw an application?
Withdrawal is permitted before pronouncement in practice, and it is the right course where the hearing reveals that an adverse ruling is likely.
Is an appeal available?
Yes, to the Appellate Authority under Section 100 within the prescribed period, and a rectification route exists under Section 102.
Does a ruling protect against penalty?
It protects the ruled transaction while it is binding. Even an adverse ruling establishes disclosure, which defeats suppression for the period.
Should each group company apply separately?
Only where the facts differ. Otherwise a single well constructed application, or an association route, is better.
In this cluster
- GST 2.0: two slabs did not end classification litigation, they moved the battle line
- Rate change transition: time of supply, credit notes and stock in hand
- Classification disputes under GST: the principles the courts apply
- Westinghouse Saxby: the sole or principal use test and the end of easy classification
- HSN, common parlance and the General Rules of Interpretation
- Composite supply versus mixed supply: the test, and the tax
- Principal supply in bundled contracts: getting the rate right
- Food, beverages and the restaurant service rate maze
- Textiles and apparel: the rate structure and the disputes it produces
- Pharmaceuticals and medical devices: the concession and its boundaries
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.