Advance Ruling Application explained: this guide covers what Advance Ruling Application means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Overview
This article provides a detailed explanation of Advance Ruling Application (ARA-01) under the CGST/IGST Act and GST Rules. Understanding these provisions is critical for every GST-registered taxpayer to ensure compliance and avoid penalties.
Relevant provisions: Section 97 + Rule 104, read with applicable CGST/SGST Rules and CBIC Circulars. Updated with Finance Act 2025 amendments and latest CBIC notifications up to March 2026.
What the Law Requires
Section 97 + Rule 104 establishes the framework for ARA-01. The provisions cover scope, conditions, time limits, documentation, and consequences of non-compliance. The corresponding Rules provide detailed procedures, forms, and formats.
Applicability
| Taxpayer Type | Applicable? | Notes |
|---|---|---|
| Regular Taxpayer | Yes | Full compliance required |
| QRMP Scheme | Yes, modified | Quarterly filing for turnover up to Rs. 5 crore |
| Composition Dealer | Limited | Simplified scheme; limited ITC |
| E-commerce Operator | Yes | Additional TCS obligations |
| Casual/Non-resident | Yes | Advance tax deposit required |
Practical Examples
Example 1: Amit runs a trading business in Faridabad (turnover Rs. 2 crore). He is a regular GST taxpayer. For ARA-01, he must ensure proper documentation, timely filing, and accurate reporting in GSTR-1 and GSTR-3B.
Example 2: A manufacturer exports goods worth Rs. 50 lakh under LUT (Letter of Undertaking). The export is zero-rated under Section 16 of IGST Act. The manufacturer can claim refund of accumulated ITC on inputs used for such exports.
Calculation Example:
| Particular | Amount (Rs.) |
|---|---|
| Taxable Value | 5,00,000 |
| CGST @ 9% | 45,000 |
| SGST @ 9% | 45,000 |
| Total Invoice Value | 5,90,000 |
Key Facts About Advance Ruling Application
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes Advance Ruling Application end to end for you.
What is ARA-01?
Section 97 + Rule 104 of the CGST/IGST Act governs ARA-01. It covers requirements, procedures, and penalties.
What is the penalty?
Varies from Rs. 10,000 to 100% of tax. Interest at 18% on all shortfalls. Prosecution for fraud above Rs. 5 crore.
Over 90% of compliance penalties in India arise from missed due dates — timely handling of Advance Ruling Application can save businesses thousands of rupees each year.
Advance Ruling Application: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
A draft application to the Authority for Advance Ruling in Form GST ARA-01 under Section 97 of the CGST Act, 2017, seeking a ruling on classification/rate/ITC etc. before undertaking a transaction.
BEFORE THE [STATE] AUTHORITY FOR ADVANCE RULING (GST)
APPLICATION FOR ADVANCE RULING under Section 97 of the CGST/[State]GST
Act, 2017 read with Rule 104 — FORM GST ARA-01
Ref: ARA-01 Date: [DD-MM-YYYY]
To,
The [State] Authority for Advance Ruling, [Address].
1. Applicant details
Legal Name : [Legal Name]
GSTIN / User-ID : [22ABCDE1234F1Z5]
Address : [Registered Address, State, PIN]
Jurisdiction : [Centre/State — Range/Ward]
2. Nature of activity for which advance ruling is sought:
[ ] Manufacture [ ] Trading [ ] Service [ ] Other: [___]
Description: [e.g., supply of solar power generating systems with
installation].
3. Question(s) on which advance ruling is required
(must fall within Section 97(2) clauses a–g):
Q1. Whether [product/service] is classifiable under HSN/SAC [____]
and taxable at [__]% under Notification [___]?
Q2. Whether input tax credit is admissible under Section 16/17 on
[___] used for [___]?
[Add further questions as needed.]
4. Statement of relevant facts having a bearing on the question(s):
[Set out the transaction, contract terms, product/service details,
and how tax is presently being charged, in numbered sub-paras.]
5. Statement of the applicant's interpretation of law and/or facts:
It is respectfully submitted that [applicant's view], because
[reasons — refer to Section, Notification, Schedule entry, HSN
Explanatory Notes / relevant AAR-AAAR rulings].
6. Declaration
(a) The question raised is NOT pending or decided in any proceeding
in the applicant's case under any provision of the Act.
(b) The fee of ₹5,000 under CGST + ₹5,000 under SGST (total ₹10,000)
has been paid vide challan CIN [___].
VERIFICATION
I, [Name], [designation], authorised signatory of the applicant,
solemnly declare that the contents of this application and the annexed
statements are true and correct.
Place: [___] Date: [DD-MM-YYYY]
For [Legal Name]
____________________
[Authorised Signatory]
Enclosures: (1) Fee challan (₹10,000); (2) Statement of facts &
interpretation; (3) Copy of GST registration; (4) Authorisation letter.
- File Form GST ARA-01 on the portal after paying a fee of ₹5,000 CGST + ₹5,000 SGST (Rule 104); apply before undertaking the transaction — a ruling on a completed/pending issue is barred by Section 98(2).
- Advance ruling questions are limited to the seven clauses of Section 97(2) — classification, applicability of a notification, time/value of supply, ITC admissibility, tax liability, registration requirement, and whether an act amounts to a supply.
- The ruling binds only the applicant and the concerned officer (Section 103); an aggrieved party may appeal to the AAAR in Form GST ARA-02/ARA-03 within 30 days (Section 100).
- State the question sharply and give your own reasoned interpretation — a well-argued interpretation with supporting HSN notes and citations improves the outcome.
Disclaimer: This is a general-purpose template for reference only. Facts, figures, stamp duty and clauses vary with your situation and state law — have it reviewed before use. Need this professionally drafted, stamped and filed? Talk to a TaxClue expert.