Quick Answer
A GST Advance Ruling (AAR) is a written, pre-emptive decision by the Authority for Advance Ruling on specific GST questions about your transactions — classification, rate of tax, ITC eligibility, place or time of supply, valuation, or whether you must register. It is binding on the applicant and the jurisdictional officer for the same facts, must be pronounced within 90 days (Section 98(6)), and costs Rs10,000 in total. It is not a precedent for other taxpayers.
Ruling limit 90 days
Total fee Rs10,000
Form GST ARA-01
Precedent value None
Section 95(c)
Who Can Apply for a GST Advance Ruling?
Under Section 95(c) of the CGST Act, an "applicant" who may seek an Advance Ruling is:
| Applicant type | Eligible? | Notes |
|---|---|---|
| Registered taxpayer | Yes | Can ask about existing or proposed transactions |
| Person seeking GST registration | Yes | New business can get clarity before it starts |
| Unregistered person with no plan to register | No | Not covered by the Section 95(c) definition |
| Foreign supplier with no establishment in India | No | Needs a business establishment in India first |
The ruling binds the applicant once registered; apply to the AAR of the relevant State.
Apply in the State where the transaction happens
Each State has its own AAR. A ruling from one State's AAR is not binding on the AAR of another State, so a business operating across States must apply separately in each relevant State for the same question.
Section 97(2)
What Questions Can the AAR Decide?
Section 97(2) lists the admissible questions. The AAR can rule only on these — not on general or hypothetical matters:
- Classification of any goods or services (the correct HSN / SAC code).
- Applicability of a notification having a bearing on the rate of tax.
- Determination of time and value of the supply of goods or services.
- Admissibility of Input Tax Credit of tax paid or deemed paid.
- Liability to pay tax on any goods or services.
- Whether registration is required in a given situation.
- Whether a particular activity amounts to a supply of goods or services.
Rate questions now sit in the GST 2.0 two-slab structure
Since the GST 2.0 rationalisation effective 22 September 2025, most goods and services fall under a two-slab system — 5% and 18%, with a 40% demerit rate on select sin/luxury goods; the earlier 12% and 28% slabs have largely been removed. When you seek a ruling on the "rate of tax", frame it against the current slabs.
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AAR Application Process
The application is filed online on the GST portal in Form GST ARA-01 under Rule 104, with the fee paid by challan. The AAR must pronounce its ruling within 90 days.
File ARA-01Pay Rs5,000 CGST + Rs5,000 SGST
→
AdmissibilityAAR checks Sec 97(2) & 98(2)
→
HearingPersonal / written submissions
→
RulingPronounced within 90 days
| Step | Action | Timeline |
|---|---|---|
| 1 | File Form GST ARA-01 on the portal; pay Rs5,000 CGST + Rs5,000 SGST | Day 0 |
| 2 | AAR examines admissibility (question not pending/decided in the applicant's case) | Within a few weeks |
| 3 | Personal hearing or written submissions before the AAR | Scheduled by the AAR |
| 4 | AAR pronounces the ruling | Within 90 days (Sec 98(6)) |
| 5 | If unfavourable, appeal to AAAR in Form GST ARA-02 | Within 30 days of the ruling |
| 6 | AAAR passes its order | Within 90 days of the appeal |
A pending application may be rejected under Sec 98(2) if the same question is already pending or decided in the applicant's case.
Cost
AAR Fee & the Appeal Fee
| Stage | Form | Fee |
|---|---|---|
| Advance Ruling (AAR) | GST ARA-01 | Rs10,000 (Rs5,000 CGST + Rs5,000 SGST) |
| Appeal to AAAR | GST ARA-02 | Rs10,000 (Rs5,000 CGST + Rs5,000 SGST) |
| Departmental appeal to AAAR | GST ARA-03 | Nil |
The fee is non-refundable, even if the application is withdrawn before the ruling.
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AAR vs AAAR vs High Court
| Forum | Who presides | Binding on | Time limit | Appeal to |
|---|---|---|---|---|
| AAR (Authority for Advance Ruling) | One CGST + one SGST officer | Applicant & jurisdictional officer, same facts | 90 days | AAAR |
| AAAR (Appellate Authority) | Chief Commissioner / Commissioner level | Applicant & jurisdictional officer, same facts | 90 days | High Court |
| High Court | Division Bench (writ) | Persons within the State; precedent in State | No statutory limit | Supreme Court |
Both AAR and AAAR are constituted separately in each State.
An AAR ruling is not a precedent
A favourable ruling in one State cannot be cited by a different taxpayer in another State facing the same issue — each State AAR is independent and rulings often conflict. Only a High Court or Supreme Court decision gives wider, precedent-setting clarity.
A ruling stays binding while the facts and the law are unchanged. It can be declared void ab initio under Section 104 if it was obtained by fraud, suppression or misrepresentation of material facts.
Government sourcesAdvance ruling provisions: gst.gov.in · CBIC: cbic-gst.gov.in · Sections 95-106 & Rule 104, CGST Act & Rules 2017 (Form GST ARA-01) · GST 2.0 two-slab rate structure effective 22 September 2025
People also ask
Frequently Asked Questions
Basics
What is a GST Advance Ruling?
A GST Advance Ruling is a written decision given by the Authority for Advance Ruling (AAR) on specific GST questions about a taxpayer's transactions — such as classification, rate of tax, ITC eligibility, time or place of supply, valuation, or whether registration is required. It provides certainty before or during a transaction and is binding on the applicant and the jurisdictional GST officer for the same set of facts.
Which sections of the CGST Act govern Advance Rulings?
Advance Rulings are governed by Sections 95 to 106 of the CGST Act 2017, with mirror provisions in each State GST Act. Section 95 defines the terms, Section 96 constitutes the AAR, Section 97 lists the questions that can be asked, Section 98 sets the 90-day procedure and ruling, Sections 99-101 cover the AAAR and appeals, and Sections 103-104 deal with the binding effect and void rulings. Rule 104 prescribes Form GST ARA-01.
Is a GST Advance Ruling binding?
Yes, but only in a limited way. The ruling is binding on the applicant who sought it and on the jurisdictional/concerned GST officer, and only for the same set of facts and as long as the law does not change. It is not binding on any other taxpayer and cannot be used as a precedent, and even the AAR of another State is not bound by it.
Eligibility
Who can apply for a GST Advance Ruling?
Under Section 95(c), an application can be made by a person already registered under GST or by a person who is not registered but is desirous of obtaining registration. This lets a new business get clarity on classification, rate or liability before it starts operations. An unregistered person with no intention to register, or a foreign supplier without an establishment in India, generally cannot apply.
Can a new or unregistered business apply for an Advance Ruling?
Yes. Section 95 allows a person who is desirous of obtaining GST registration to seek an Advance Ruling even before registering. A new business that wants clarity on GST classification, applicable rate or ITC before commencing operations can apply to the AAR of the relevant State, and the ruling becomes binding once the person registers.
Can a department or GST officer seek an Advance Ruling?
The AAR application under Section 95(c) is available to the taxpayer/applicant, not to the department for seeking a fresh ruling. However, the concerned officer or the jurisdictional officer can file an appeal against an AAR ruling before the AAAR (in Form GST ARA-03, without fee) if the department disagrees with the ruling.
Questions
What questions can be raised before the AAR?
Section 97(2) lists seven admissible matters: classification of goods or services; applicability of a notification affecting the rate of tax; determination of time and value of supply; admissibility of input tax credit; liability to pay tax on any goods or services; whether the applicant must obtain registration; and whether a particular activity amounts to a supply of goods or services. Questions outside this list cannot be admitted.
Can the AAR rule on the place of supply?
This has been contentious. Place of supply is not expressly listed in Section 97(2), so several AARs have declined to answer place-of-supply questions, holding they lack jurisdiction. The AAR primarily decides classification, rate, ITC, time and value of supply, liability and registration. For place-of-supply certainty, businesses often need a High Court ruling instead.
What GST rate can the AAR confirm after GST 2.0?
The AAR confirms the correct rate under the current structure. Following the GST 2.0 rationalisation effective 22 September 2025, most goods and services fall under a two-slab system of 5% and 18%, with a 40% demerit rate on select sin and luxury items, and the earlier 12% and 28% slabs have largely been removed. A rate ruling is decided against these current slabs and the relevant classification.
Process & Fee
How do I apply for a GST Advance Ruling?
File Form GST ARA-01 online on the GST portal under Rule 104, along with a statement of facts, the question, and the fee paid by challan. The AAR examines admissibility, may hold a personal hearing, and pronounces its ruling. If the ruling is unfavourable, you can appeal to the AAAR in Form GST ARA-02 within 30 days.
What is the fee for a GST Advance Ruling?
The fee is Rs5,000 under CGST plus Rs5,000 under the respective SGST Act, a total of Rs10,000 per application, paid by challan on the GST portal. An appeal to the AAAR carries the same Rs10,000 fee (Form GST ARA-02). The fee is non-refundable regardless of the outcome or if the application is withdrawn.
How long does the AAR take to give a ruling?
Section 98(6) requires the AAR to pronounce its Advance Ruling within 90 days from the date of receipt of the application. In practice, timelines can extend where personal hearings and clarifications are involved, but 90 days is the statutory limit for the AAR to issue its ruling.
What form is used to file a GST Advance Ruling?
The application for an Advance Ruling is filed in Form GST ARA-01 under Rule 104(1) on the common GST portal. An appeal to the Appellate Authority (AAAR) is filed by the applicant in Form GST ARA-02, and a departmental appeal by the concerned/jurisdictional officer is filed in Form GST ARA-03.
Appeals & Validity
Can a GST Advance Ruling be appealed?
Yes. If the applicant or the department is dissatisfied with the AAR ruling, an appeal can be filed before the Appellate Authority for Advance Ruling (AAAR) of the same State within 30 days of the ruling being communicated. The applicant appeals in Form GST ARA-02 with a Rs10,000 fee; the department appeals in Form GST ARA-03. The AAAR ordinarily decides within 90 days.
Two State AARs gave conflicting rulings — which one applies?
State AARs are independent and their rulings do not bind AARs in other States. If two States give contradictory rulings on the same issue, each binds only the applicant before that AAR. The contradiction alone cannot be directly challenged; wider resolution comes through the High Court or Supreme Court, or eventually a national appellate mechanism. A business operating across States should apply to each relevant State AAR separately.
Can an Advance Ruling be withdrawn or become void?
An applicant may withdraw a pending application in writing before the ruling is pronounced, though the fee is not refunded. Once pronounced, a ruling cannot be withdrawn — only appealed within 30 days. Under Section 104, a ruling can be declared void ab initio (as if never made) if it was obtained by fraud, suppression of material facts, or misrepresentation, or it ceases to apply if the underlying facts or the law change.
How long is a GST Advance Ruling valid?
A ruling has no fixed expiry date. It remains binding as long as the facts of the applicant's transaction and the relevant law stay the same. It ceases to apply if the law is amended so the ruling becomes inconsistent, if a higher forum overrules the interpretation, or if it is declared void under Section 104 for fraud or misrepresentation.
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