Section 99 of the CGST Act, 2017, deals with the Appellate Authority for Advance Ruling (AAAR). This provision specifies the constitution and jurisdiction of the AAAR under the GST framework. According to this section, the Appellate Authority constituted under a SGST Act or a UTGST Act shall be considered the Appellate Authority for Advance Ruling for that respective State or Union Territory.
This means the CGST Act does not create a separate appellate authority at the central level. Instead, it recognizes and validates the AAAR set up under State or UT GST laws.
Why Was the Appellate Authority for Advance Ruling Introduced?
The Appellate Authority for Advance Ruling was introduced to bring clarity and resolve disputes related to advance rulings issued by the Advance Ruling Authorities. Taxpayers often seek advance rulings to understand the tax implications of certain transactions before execution. However, if a ruling by the Authority for Advance Ruling (AAR) is not satisfactory or is disputed, the taxpayer or the tax department can appeal to the AAAR.
This appellate mechanism ensures:
Consistency in tax interpretations,
Speedy dispute resolution,
Greater taxpayer confidence in the GST regime.
Who Constitutes the Appellate Authority for Advance Ruling?
Each State or Union Territory is empowered to constitute its own Appellate Authority under the respective SGST or UTGST Act. As per Section 99 of the CGST Act, this same authority shall act as the Appellate Authority for Advance Ruling under the Central GST Act as well.
The composition generally includes:
One member from the Central Tax (appointed by the Central Government),
One member from the State or Union Territory Tax (appointed by the State or UT Government).
These two members jointly hear and decide appeals against rulings of the respective Advance Ruling Authority.
What Is the Role of the Appellate Authority for Advance Ruling?
The primary function of the Appellate Authority is to hear appeals against the decisions or advance rulings given by the Authority for Advance Ruling (AAR). Either the taxpayer or the concerned tax officer may file an appeal if aggrieved by the AAR’s decision.
The AAAR:
Reviews the facts and legal positions taken by the AAR,
Considers arguments from both sides,
Issues a speaking order either upholding, modifying, or setting aside the advance ruling.
The decision of the AAAR is binding on the applicant and the jurisdictional tax authorities.
Is There a Time Limit to File an Appeal Before the AAAR?
Yes. As per GST provisions:
The appeal to the AAAR must be filed within 30 days from the date of communication of the ruling by the AAR.
The AAAR may allow an extension of another 30 days, if sufficient cause is shown.
This timeline ensures that disputes are addressed quickly and that certainty is provided to the taxpayer.
What Happens if the Two Members of the AAAR Differ in Opinion?
If the two members of the Appellate Authority have a difference of opinion, no ruling is issued. In such cases, the matter remains unresolved due to the deadlock, and the original advance ruling by the AAR may lose its binding nature. This remains a limitation in the current structure of the AAAR under the GST regime.
What Is the Legal Effect of Section 99 in the GST Framework?
Section 99 harmonizes the GST structure by integrating the functioning of appellate authorities under the Central and State GST laws. By deeming the AAAR set up under SGST or UTGST Acts to be the same under the CGST Act, it avoids duplication and promotes uniformity across jurisdictions.
This section ensures that taxpayers do not have to approach separate authorities under different laws for the same matter, thereby simplifying compliance and improving the ease of doing business.
Conclusion
Section 99 plays a crucial role in the dispute resolution mechanism under GST. It:
Recognizes State-level AAARs for both Central and State laws,
Facilitates a structured appeal process,
Strengthens the advance ruling system.
Understanding Section 99 is vital for businesses seeking clarity on GST matters and for professionals representing clients before the AAAR. It ensures that a unified and efficient system is in place to resolve tax-related uncertainties in a time-bound manner.
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