Section 97 of CGST Act, 2017 – Application for Advance Ruling
Section 97 of CGST Act, 2017 – Application for Advance Ruling
Act: Central Goods and Services Tax Act, 2017
Chapter: XVII – Advance Ruling
Section Covered: Section 97
Effective From: 01st July 2017
🔎 Introduction
Section 97 of the CGST Act, 2017 provides the procedure for making an application to the Authority for Advance Ruling (AAR).
It specifies:
• Who can apply
• The manner of application
• The questions on which advance ruling can be sought
This section is crucial because it defines the jurisdictional limits of the Advance Ruling Authority.
📜 Bare Provision – Section 97
(1) Application
An applicant desirous of obtaining an advance ruling may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought.
(2) Questions on Which Advance Ruling Can Be Sought
The question on which advance ruling is sought shall be in respect of:
(a) Classification of any goods or services or both
(b) Applicability of a notification issued under the Act
(c) Determination of time and value of supply
(d) Admissibility of input tax credit of tax paid or deemed to have been paid
(e) Determination of liability to pay tax on any goods or services or both
(f) Whether applicant is required to be registered
(g) Whether any particular thing done by the applicant amounts to or results in a supply
✅ Meaning in Simple Words
Section 97 allows a taxpayer to seek clarification from GST authorities in advance on specific issues.
However:
👉 The ruling can only be sought on the limited matters listed in sub-section (2).
👉 The Authority cannot decide issues outside this list.
👤 Who Can Apply?
• Any registered person
• Any person desirous of obtaining GST registration
Thus, even a person planning to start business may apply for advance ruling.
📌 Scope of Questions Allowed
Advance ruling can only be sought on the seven categories mentioned above.
It cannot be sought on:
• General interpretation issues not covered
• Hypothetical matters unrelated to applicant’s business
• Questions already decided or pending (covered under Section 98)
📊 Practical Illustrations
Illustration 1 – Classification Issue
A company manufactures a new product and is unsure whether it falls under 12% or 18% GST.
➡ It may seek advance ruling under Section 97(2)(a).
Illustration 2 – ITC Eligibility
A business wants clarity on whether ITC is available on certain expenses.
➡ It may apply under Section 97(2)(d).
Illustration 3 – Requirement of Registration
A person supplying services across State boundaries wants to confirm if registration is mandatory.
➡ Application can be made under Section 97(2)(f).
⚖️ Judicial Interpretation of Section 97
Courts have consistently held that jurisdiction of AAR is limited to questions listed in Section 97(2).
1️⃣ Columbia Sportswear Company v. Director of Income Tax (SC)
The Supreme Court held that advance ruling authorities must operate strictly within statutory boundaries.
👉 Principle: No ruling beyond jurisdiction conferred by statute.
2️⃣ Various GST High Court Decisions
High Courts have ruled that AAR cannot entertain questions beyond those specifically listed under Section 97(2).
👉 Jurisdiction is restrictive and not advisory in nature.
🎯 Objective of Section 97
The key objectives are:
✔ To provide tax certainty before undertaking transactions
✔ To reduce litigation
✔ To clarify classification and tax liability issues
✔ To encourage voluntary compliance
📌 Important Points to Remember
• Application must be filed in prescribed form
• Prescribed fee must be paid
• Question must fall strictly within Section 97(2)
• Only applicant-specific ruling is given
• It applies to supply undertaken or proposed to be undertaken
🔄 Section 97 in Context of Advance Ruling Framework
| Section | Subject |
|---|---|
| Section 95 | Definitions |
| Section 96 | Authority for Advance Ruling |
| Section 97 | Application for Advance Ruling |
| Section 98 | Procedure on receipt of application |
Section 97 activates the Advance Ruling mechanism.
❓ Frequently Asked Questions (FAQs) – Section 97 CGST
Q1. Who can file application under Section 97?
Any registered person or person seeking registration.
Q2. Can ruling be sought for past transactions?
No. It applies to transactions undertaken or proposed to be undertaken.
Q3. Is application fee mandatory?
Yes, prescribed fee must be paid.
Q4. Can AAR answer general GST queries?
No. Only questions specified in Section 97(2).
Q5. Can classification disputes be resolved through advance ruling?
Yes, under clause (a).
Q6. Can ITC eligibility be clarified?
Yes, under clause (d).
Q7. Can ruling be sought on place of supply?
Generally no, unless it directly falls within specified categories.
Q8. Is ruling binding on other taxpayers?
No. It is binding only on applicant and concerned officers.
Q9. Can multiple questions be raised in one application?
Yes, if they fall within Section 97(2).
Q10. What happens if question is outside Section 97(2)?
Application may be rejected.
📝 Conclusion
Section 97 of the CGST Act, 2017 provides the statutory mechanism for filing an application for Advance Ruling. It clearly defines who can apply and restricts the scope of questions to specific categories.
By limiting jurisdiction and providing procedural clarity, this section ensures that the Advance Ruling Authority functions within defined legal boundaries, thereby promoting certainty and reducing GST disputes.
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