Indirect Tax Laws and Practice · Dispute Resolution Mechanism under GST

Advance Ruling under GST: Procedure, Questions and Binding Effect

Updated 11 October 2026 · Fact-checked

An advance ruling is a written decision by the Authority for Advance Ruling on a question about a supply that the applicant is undertaking or proposes to undertake. The question must fall within section 97(2). You apply in FORM GST ARA-01 with a fee of ₹5,000. The ruling binds only the applicant and the officers concerned with that applicant.

Understand Advance Ruling under GST

An advance ruling (section 95(a)) is a decision given to an applicant on a question in section 97(2), relating to a supply of goods or services or both that the applicant is undertaking or proposes to undertake. It gives certainty before you act, so you avoid a later dispute.

The applicant is any person registered, or desirous of obtaining registration, under the Act. So an unregistered person planning a business can also apply.

The Authority is not a central body. Under section 96, the Authority for Advance Ruling constituted under a State or Union Territory GST Act is deemed to be the Authority for that State or Union territory. Under the CGST Rules, its members are officers not below the rank of Joint Commissioner.

The ruling is limited in effect. Under section 103, it binds only the applicant and the concerned or jurisdictional officer in respect of that applicant. It does not bind other taxpayers, even those in the same business. It holds only as long as the law, facts or circumstances supporting it have not changed.

If you or the department disagree with the ruling, appeal lies to the Appellate Authority. That is a separate topic. Here, focus on what can be asked, how to apply, how the Authority decides, and whom the ruling binds.

Key rules to remember

Questions allowed (section 97(2)): (a) classification; (b) applicability of a notification; (c) time and value of supply; (d) admissibility of ITC; (e) liability to pay tax; (f) whether registration is required; (g) whether a thing done amounts to a supply; Seven heads. A question outside these heads cannot be raised. Remember them as C-N-T/V-I-L-R-S.
Application and fee: FORM GST ARA-01 on the common portal; fee ₹5,000; Rule 104. Signed in the manner given in rule 26.
Time limit for ruling: Ruling in writing within 90 days of receipt of application; Section 98(6).
Admit or reject: Order admitting or rejecting after hearing; no rejection without hearing; reasons must be stated; Section 98(2). Do not admit if the question is already pending or decided in any proceedings in the applicant's case under the Act.
Binding effect: Binds the applicant and the concerned/jurisdictional officer in respect of the applicant, unless law, facts or circumstances change; Section 103(1) and (2).
Difference among members: Members differ: state points of difference and refer to the Appellate Authority; Section 98(5).
Appeal fee: Applicant: FORM GST ARA-02, ₹10,000; officer: FORM GST ARA-03, no fee; Rule 106.

How to solve Advance Ruling under GST questions

Use this method for any question on advance ruling, whether theory or a case.

1Identify the person. Is the person registered or desirous of registration? If so, the person is an applicant.
2Check the question raised against the seven heads of section 97(2). If it fits none, the application cannot be made on it.
3Check that it relates to a supply being undertaken or proposed by the applicant.
4Check the bar: if the question is already pending or decided in the applicant's own proceedings under the Act, the Authority shall not admit it.
5State the procedure: FORM GST ARA-01, ₹5,000, forwarded to the concerned officer, hearing, then an order admitting or rejecting.
6Give the timeline and outcome: ruling within 90 days; copy sent to the applicant, concerned officer and jurisdictional officer.
7State the binding effect: only the applicant and the officers in respect of that applicant, until law, facts or circumstances change.
8Conclude with a clear answer and mention appeal if the question asks about a dissatisfied party.

Quickest way: Three-check shortcut for advance ruling questions

When to use it: Use for MCQs and short case questions where you must decide whether an application or ruling is valid.

Question check: is it one of the seven section 97(2) heads?
Pending check: is the same question already pending or decided in the applicant's case?
Binding check: is the person the applicant or the officer concerned with the applicant, and have law or facts changed?
Numbers to recall: ₹5,000 application, 90 days, ₹10,000 appeal fee.

Common mistakes in Advance Ruling under GST

Saying an advance ruling binds all taxpayers in the same trade.
Students confuse a ruling with a circular or a court judgment.
Fix: Remember section 103(1): it binds only the applicant and the concerned or jurisdictional officer in respect of the applicant.
Treating a ruling as binding forever.
The words 'binding' are remembered but the condition is missed.
Fix: Add that it is binding unless the law, facts or circumstances supporting the original ruling have changed (section 103(2)).
Listing questions outside section 97(2), such as the validity of an assessment or penalty.
Students assume any doubt about GST can be put to the Authority.
Fix: Allow only the seven heads. Questions on past demands or penalties are not among them.
Stating that the Authority can reject an application without hearing the applicant.
The hearing proviso is overlooked.
Fix: Section 98(2) says no rejection without an opportunity of hearing, and reasons must be given in the order.
Mixing up fees: ₹5,000 for application and ₹10,000 for appeal.
Both are rule numbers close to each other.
Fix: Link ARA-01 with ₹5,000 (rule 104) and ARA-02 with ₹10,000 (rule 106). The officer's appeal in ARA-03 carries no fee.
Thinking the Authority is a central body for all of India.
GST is a national tax, so students assume one authority.
Fix: Under section 96, the State or Union Territory Authority is deemed to be the Authority for that State or Union territory.

Worked examples

Example 1

Sundaram Traders Pvt Ltd, Chennai, is registered under GST. It plans to supply a new product and is unsure whether it falls under a particular rate notification. Can it seek an advance ruling? State the procedure and time limit, and say who is bound by the ruling.

Show the solution

Sundaram is registered, so it is an applicant under section 95(c).
Whether a notification applies is a question on the applicability of a notification, which is section 97(2)(b). The product is proposed to be supplied, so the supply is one being undertaken or proposed.
It must apply in FORM GST ARA-01 on the common portal with a fee of ₹5,000 (rule 104). The Authority sends a copy to the concerned officer and may call for records.
After hearing the applicant and the officer, the Authority admits or rejects by order. If admitted, it pronounces the ruling after a further hearing.
The ruling must be given in writing within 90 days of receiving the application (section 98(6)).
Under section 103, the ruling binds Sundaram and the concerned or jurisdictional officer in respect of Sundaram only, and only until law, facts or circumstances change.

Answer: Yes. The question falls under section 97(2)(b). Apply in ARA-01 with ₹5,000; ruling within 90 days; binding only on Sundaram and its officers, unless law or facts change.

Example 2

Kiran Enterprises applies for an advance ruling on the admissibility of input tax credit on an expense. The same question is already pending in a proceeding against Kiran under the CGST Act. The Authority wishes to reject the application. What must it do?

Show the solution

Admissibility of ITC is a permitted head under section 97(2)(d), so the subject matter is valid.
Under the first proviso to section 98(2), the Authority shall not admit an application where the question is already pending or decided in any proceedings in the applicant's case under the Act. Here it is pending, so admission is barred.
Rejection must follow an opportunity of hearing to the applicant (second proviso).
The order must specify the reasons for rejection (third proviso).
Under section 98(3), a copy of the order is sent to the applicant and the concerned officer.

Answer: The Authority cannot admit the application because the same question is pending in Kiran's proceedings. It may reject it by order only after hearing Kiran, stating reasons, and sending a copy to Kiran and the concerned officer.

Exam tips

MCQs often test the list in section 97(2). Learn all seven heads and spot the odd one out.
Remember the numbers: ₹5,000 application fee, 90 days for ruling, ₹10,000 appeal fee by applicant, no fee for the officer.
In case questions, write who is bound. 'Only the applicant and the concerned officer' earns the mark.
Always add the condition 'unless law, facts or circumstances have changed' when discussing binding effect.
If asked who can apply, say registered persons and persons desirous of obtaining registration.

Practice questions from Dispute Resolution Mechanism under GST

Advance Ruling under GST in other exams

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

Advance Ruling under GST: frequently asked questions

On what questions can an advance ruling be sought under GST?

Section 97(2) allows seven heads: classification, applicability of a notification, time and value of supply, admissibility of ITC, liability to pay tax, whether registration is required, and whether a thing done is a supply. A question outside these cannot be raised.

Who can apply for an advance ruling?

An applicant is any person registered or desirous of obtaining registration under the Act. The ruling relates to a supply being undertaken or proposed to be undertaken by the applicant.

How long does the Authority take to give the ruling?

It must pronounce its ruling in writing within ninety days from the date of receipt of the application. A signed and certified copy is then sent to the applicant, the concerned officer and the jurisdictional officer.

Is an advance ruling binding on everyone?

No. Under section 103 it binds only the applicant and the concerned or jurisdictional officer in respect of the applicant. It remains binding unless the law, facts or circumstances supporting it have changed.

What happens if the members of the Authority disagree?

They state the points on which they differ and refer the question to the Appellate Authority for hearing and decision, as provided in section 98(5).