Indirect Tax Laws · Advance Ruling

Authority for Advance Ruling: Constitution and Members (Rule 103 CGST Rules)

Updated 5 October 2026 · Fact-checked

The Authority for Advance Ruling (AAR) is the body that gives binding rulings on GST questions before a transaction happens. Under Rule 103 of the CGST Rules it has two members: one officer of central tax and one officer of State or Union territory tax, designated by the Central Government and the State or UT Government respectively.

Understand Authority for Advance Ruling: Constitution and Members

An advance ruling is a written decision on a GST question, given before you undertake a supply or activity. The body that gives it at the first level is the Authority for Advance Ruling (AAR). Its purpose is certainty. The applicant knows the tax position in advance and avoids a later dispute.

The GST law is a joint Centre-State law, so the AAR is also a joint body. Rule 103 of the CGST Rules provides the composition. The Authority consists of one member from the officers of central tax and one member from the officers of State tax or Union territory tax. The central tax member is designated by the Central Government. The State or UT tax member is designated by the State Government or Union territory Government, as the case may be.

Section 96 of the CGST Act deals with the constitution. The AAR constituted under the State or Union territory GST Act is deemed to be the AAR for the purposes of the CGST Act. So there is one AAR per State or Union territory, not a single national AAR, and no separate CGST body. Section 96 gives the deeming rule. Rule 103 gives the composition of the members.

Do not mix this up with the Appellate Authority for Advance Ruling (AAAR). It sits one level higher and hears appeals against the AAR's ruling. Under Rule 104 it consists of the Chief Commissioner of central tax designated by the Board and one officer of State or Union territory tax, who is the Commissioner of State tax or Union territory tax, designated by the State or UT Government.

The two-member structure matters when the members disagree. If the two members of the AAR differ on any point, they do not issue a ruling. They state the point or points of difference and refer it to the Appellate Authority for hearing. If the two members of the AAAR differ, no advance ruling is issued on the question.

Key rules to remember

Composition of AAR (Rule 103): AAR = 1 central tax officer + 1 State/UT tax officer; Two members in total. One comes from each administration, designated by the Central Government and the State or UT Government respectively.
Appointing authority: Central member: Central Government; State/UT member: State/UT Government, respectively; Each government designates its own officer as a member.
Constitution and deeming: AAR constituted under the State/UT GST Act = AAR for the CGST Act; Section 96 deems the State/UT AAR to be the AAR for CGST purposes. Rule 103 provides the member composition. One AAR per State or Union territory.
Composition of AAAR (Rule 104): AAAR = Chief Commissioner of central tax (designated by the Board) + Commissioner of State/UT tax (designated by the State/UT Government); Confirm the exact wording in the latest ICAI material.
Difference of opinion: AAR members differ: refer to AAAR. AAAR members differ: no ruling.; Learn both outcomes. Examiners test the contrast.

How to solve Authority for Advance Ruling: Constitution and Members questions

Questions on this topic ask you to state the composition, check whether a body is validly constituted, or contrast the AAR with the AAAR. Use the same sequence each time.

1Identify which body the question is about: AAR (first level) or AAAR (appellate level).
2State the rule: Rule 103 for the AAR, Rule 104 for the AAAR.
3Give the composition: one central tax officer and one State or Union territory tax officer for the AAR.
4For the AAAR, give the Chief Commissioner of central tax designated by the Board and the Commissioner of State or UT tax designated by the State or UT Government.
5State who designates: the Central Government and the State Government respectively for the AAR.
6Apply to the facts: check whether both administrations are represented, whether each member was designated by the right government, and whether the body is the one for the right State.
7If the members disagree, state the consequence: referral to the AAAR for AAR, no ruling for AAAR.
8Write a one-line conclusion that answers the question asked.

Quickest way: 2-1-1 recall for AAR composition

When to use it: Use this for short MCQs and for the opening lines of a written answer when time is tight.

Remember 2 members in all: 1 from the Centre (central tax) and 1 from the State or Union territory (State/UT tax).
Remember who designates: the Central Government for the central member, the State or UT Government for the other.
Remember the AAAR is different: Chief Commissioner of central tax designated by the Board plus the Commissioner of State/UT tax.
Remember disagreement: AAR refers the point up, AAAR gives no ruling.
Scan the case for the trap: both members from one administration only, or a member designated by the wrong government.

Common mistakes in Authority for Advance Ruling: Constitution and Members

Saying the AAR has three members or a judicial member
Students confuse it with the Appellate Tribunal or with the older advance ruling bodies in other laws.
Fix: Fix the number at two: one central tax officer and one State or Union territory tax officer.
Mixing up the members of the AAR and the AAAR
Rules 103 and 104 sit next to each other and both talk about central and State officers.
Fix: The AAR has one central tax officer and one State or UT tax officer (Rule 103). The AAAR has the Chief Commissioner of central tax designated by the Board and the Commissioner of State or UT tax (Rule 104).
Thinking the Central Government constitutes the AAR
Students assume the CGST Act creates its own body.
Fix: The AAR is constituted under the State or Union territory GST Act. Section 96 of the CGST Act deems it to be the AAR for CGST purposes. The members are designated by the Central Government and the State Government respectively.
Saying a difference of opinion in the AAR means no ruling
Students apply the AAAR consequence to the AAR.
Fix: If the AAR members differ, they refer the points of difference to the AAAR. Only when AAAR members differ is it treated as no advance ruling.
Writing that both members come from the same administration
Students forget that GST is a joint Centre-State law.
Fix: Always state one from central tax and one from State or Union territory tax.
Citing a wrong rule number for AAAR composition
Rules 103 and 104 sit next to each other.
Fix: Rule 103 is the AAR. Rule 104 is the AAAR. If unsure of a number, describe the rule in words.

Worked examples

Example 1

The State Government designates two officers of State tax as the two members of the Authority for Advance Ruling of that State. No officer of central tax is designated. Is the Authority composed as Rule 103 requires?

Show the solution

Provision: Rule 103 requires the Authority to have one member from the officers of central tax and one member from the officers of State or Union territory tax.
Provision on designation: the central tax member is designated by the Central Government and the State or UT tax member by the State or UT Government.
Facts: both members are State tax officers, designated by the State Government. There is no central tax member.
Check representation: only the State administration is represented. The central tax member designated by the Central Government is missing.
Conclusion: the Authority is not composed as Rule 103 requires. The Central Government must designate an officer of central tax as the other member.

Answer: No. Both members are State tax officers, so the central tax member required by Rule 103 is missing.

Example 2

An applicant seeks an advance ruling. The two members of the AAR, one central tax officer and one State tax officer, disagree on the classification of the applicant's supply. (a) What happens next? (b) How does the position differ if the two members of the Appellate Authority later disagree on a point?

Show the solution

Provision: when the two AAR members differ on any point, they do not issue a ruling.
Apply (a): the members state the point or points on which they differ and refer them to the Appellate Authority for hearing.
Provision for AAAR: if the members of the Appellate Authority also differ on any point referred to them or appealed, the law treats it as if no advance ruling has been issued on that question.
Apply (b): the applicant gets no ruling on that point.
Contrast: at the first level the difference is referred up. At the appellate level there is no higher body, so the outcome is no ruling.

Answer: (a) The AAR members refer the points of difference to the Appellate Authority. (b) If the Appellate Authority members differ, no advance ruling is issued on that question.

Exam tips

Write the composition in one line: two members, one central tax and one State or Union territory tax, designated by the Central Government and the State or UT Government respectively.
In comparison questions, set out AAR and AAAR side by side: composition, who designates, and result of disagreement.
In case scenarios, check that both administrations are represented and that each member comes from the right side before concluding.
Cite the rule number (103 for AAR, 104 for AAAR) and Section 96 only if you are sure. Otherwise describe the rule in words.
MCQs have no negative marking, so attempt every one. Watch for options that swap the AAR and AAAR members.

Practice questions from Advance Ruling

Authority for Advance Ruling: Constitution and Members in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Authority for Advance Ruling: Constitution and Members: frequently asked questions

Who are the members of the Authority for Advance Ruling under GST?

There are two members. One is an officer of central tax and the other is an officer of State or Union territory tax, as per Rule 103 of the CGST Rules. Each is designated by the respective government.

Who appoints the members of the AAR?

The members are designated by the Central Government and the State Government (or Union territory) respectively. The Central Government designates the central tax member and the State Government designates the State tax member.

How is the AAR different from the AAAR in composition?

The AAR has one central tax officer and one State or UT tax officer (Rule 103). The AAAR has the Chief Commissioner of central tax designated by the Board and the Commissioner of State or UT tax designated by the State or UT Government (Rule 104). The AAAR is the appellate body for AAR rulings.

Is there one AAR for the whole country?

No. The AAR is constituted under the GST Act of each State or Union territory. Section 96 of the CGST Act deems that body to be the AAR for CGST purposes, so each State has its own.