What does this Section say?

Section 96 of the CGST Act formally recognizes the Authority for Advance Ruling (AAR) constituted under the State GST Act or Union Territory GST Act as the Authority for Advance Ruling for the purposes of the CGST Act as well. In simple terms, instead of creating separate authorities under Central GST and State GST laws, a common authority functions for both.

The objective behind this provision is administrative convenience and uniformity in tax administration. Since GST is a dual levy involving both the Central and State Governments, it is practical to have a single authority that can decide GST issues applicable under both laws.

The Authority is empowered to receive applications from taxpayers seeking clarification on specified GST matters. Such matters may include classification of goods or services, applicability of exemption notifications, determination of tax liability, admissibility of Input Tax Credit (ITC), place of supply, and other issues prescribed under the Act.

The Authority acts as a quasi-judicial body and is expected to decide applications impartially after considering facts, documents, legal provisions, and submissions made by the applicant and the department. The rulings issued by the Authority help taxpayers understand their GST obligations before undertaking transactions, thereby reducing disputes and litigation.

The section therefore serves as the foundation for the Advance Ruling mechanism by identifying the competent authority that will hear and decide such applications.

Example

A pharmaceutical company wants clarity regarding the GST classification of a newly launched medical product. It files an application before the AAR constituted under the State GST Act, which acts as the Authority under CGST as well.

Key Points

• Recognizes the Authority for Advance Ruling under GST.
• Common authority for CGST and SGST purposes.
• Provides certainty regarding tax treatment.
• Helps reduce future disputes.

In One Line

Section 96 identifies the Authority for Advance Ruling that functions under both Central and State GST laws.