Section 98 of CGST Act, 2017 – Procedure on Receipt of Application
Section 98 of CGST Act, 2017 – Procedure on Receipt of Application
Act: Central Goods and Services Tax Act, 2017
Chapter: XVII – Advance Ruling
Section Covered: Section 98
Effective From: 01st July 2017
🔎 Introduction
Section 98 of the CGST Act, 2017 lays down the procedure to be followed by the Authority for Advance Ruling (AAR) after receiving an application under Section 97.
This section ensures that applications are properly examined, admitted or rejected in accordance with law, and decided within a prescribed time limit.
It safeguards both taxpayer rights and departmental interests.
📜 Bare Provision – Section 98 (Key Points)
Upon receipt of an application:
1️⃣ The Authority shall forward a copy of the application to the concerned officer.
2️⃣ The Authority may call for relevant records from the concerned officer.
3️⃣ After examining the application and records, and after hearing the applicant and concerned officer, the Authority may either:
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Admit the application; or
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Reject the application (if conditions not satisfied).
4️⃣ Application shall not be admitted if the question raised is already pending or decided in any proceedings in the case of the applicant.
5️⃣ No application shall be rejected without giving the applicant an opportunity of being heard.
6️⃣ Where application is admitted, the Authority shall pronounce its advance ruling in writing within 90 days from receipt of application.
7️⃣ A copy of the ruling shall be sent to the applicant and concerned officer.
✅ Meaning in Simple Words
Section 98 explains what happens after you file an application for advance ruling.
👉 The Authority reviews the application.
👉 It consults the jurisdictional officer.
👉 It decides whether to admit or reject the application.
👉 If admitted, ruling must be issued within 90 days.
📌 Important Conditions for Admission
The Authority cannot admit an application if:
• The same question is already pending in any GST proceeding involving the applicant; or
• The question has already been decided in applicant’s case.
This prevents duplication and parallel proceedings.
🏛 Opportunity of Being Heard
Before rejecting the application:
✔ The Authority must give the applicant an opportunity of hearing.
✔ Principles of natural justice must be followed.
This ensures fairness in the process.
📊 Time Limit for Pronouncement
• Ruling must be pronounced within 90 days from receipt of application.
• Order must be in writing.
• Copy must be communicated to applicant and concerned officer.
The time limit promotes speedy resolution.
📖 Practical Illustration
Example 1 – Application Admitted
A company seeks advance ruling on classification of a product.
• No proceedings are pending.
• Authority admits application.
• Hearing is conducted.
• Ruling issued within 90 days.
Example 2 – Application Rejected
A taxpayer seeks ruling on GST liability for a transaction.
However, the same issue is already under investigation.
➡ Authority rejects the application after giving opportunity of hearing.
⚖️ Judicial Interpretation of Section 98
Courts have emphasized strict adherence to statutory procedure.
1️⃣ Columbia Sportswear Company Case (SC)
Advance ruling authorities must operate strictly within statutory framework.
👉 Jurisdiction must be exercised carefully.
2️⃣ High Court Rulings in GST Matters
Courts have held that rejection without providing opportunity of hearing violates principles of natural justice.
👉 Section 98(4) mandates hearing before rejection.
🎯 Objective of Section 98
The main objectives are:
✔ To ensure procedural fairness
✔ To avoid parallel litigation
✔ To maintain judicial discipline
✔ To provide time-bound resolution
📌 Important Points to Remember
• Application may be admitted or rejected
• Hearing is mandatory before rejection
• Cannot admit if issue already pending/decided
• Ruling must be issued within 90 days
• Order must be reasoned and written
🔄 Section 98 in Advance Ruling Framework
| Section | Subject |
|---|---|
| Section 95 | Definitions |
| Section 96 | Authority for Advance Ruling |
| Section 97 | Application |
| Section 98 | Procedure on Receipt |
| Section 99 | Appellate Authority |
Section 98 governs the core procedural stage.
❓ Frequently Asked Questions (FAQs) – Section 98 CGST
Q1. What happens after filing advance ruling application?
Authority examines and decides whether to admit or reject it.
Q2. Can application be rejected without hearing?
No. Opportunity of hearing is mandatory.
Q3. What if same issue is under investigation?
Application cannot be admitted.
Q4. What is the time limit for ruling?
90 days from receipt of application.
Q5. Can authority call for records?
Yes, from concerned officer.
Q6. Is written order mandatory?
Yes.
Q7. Can multiple hearings be granted?
Yes, if required.
Q8. Can ruling be delayed beyond 90 days?
Statute prescribes 90 days; delay may be challenged.
Q9. Does admission guarantee favorable ruling?
No. Admission only means matter will be decided.
Q10. Why is Section 98 important?
Because it ensures procedural safeguards and time-bound disposal of advance ruling applications.
📝 Conclusion
Section 98 of the CGST Act, 2017 lays down the procedural safeguards governing advance ruling applications. It ensures that only eligible questions are admitted, hearings are conducted fairly, and rulings are pronounced within a statutory time frame.
By incorporating principles of natural justice and structured timelines, this provision strengthens transparency and efficiency in the Advance Ruling mechanism under GST law.
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