AARs across different states have given contrary rulings on several matters.Discussions have picked up pace to bring into effect the Centralized Appellate Authority of Advance Rulings, to bring clarity on cases of different Authorities of Advance Rulings giving contrary orders.
Officials in the know said that the need to look into setting up the umbrella body has arisen after the Central Board of Indirect Taxes and Customs (CBIC) has had to clarify on the applicable rates in certain situations, on more than one occasion.
“The intent of setting up AARs at the joint commissioner level was to ensure that taxpayers get clarity at the lowest level itself, without having the need to approach a higher authority… it was meant to ease things for taxpayers, but it hasn’t worked out,” said a senior official, asking not to be named as the discussions have just begun.
Officials said the key issue of allowing all taxpayers to approach the Centralized authority and not just those parties that have got conflicting orders in different jurisdictions in a particular case, is being reconsidered.
“If I am a large company having entities in different states and have got contrary orders from different AARs, only then can I approach the Central appellate authority… it defeats the purpose of having a Central appellate, because such cases would be very few in numbers,” a second official said.
AARs across different states have given contrary rulings on several matters: whether whole time or independent director salaries fall under the ambit of goods and service tax (GST), whether sale of ice cream in cones or in bulk attract GST as a service, whether 18% tax is leviable on frozen parota or on regular parota as well.
Setting up of the Centralised Appellate Authority for Advance Ruling (AAAR) – to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue – was approved by the GST Council in its 31st meeting in December 2018, but has not been notified till date.
For getting reprieve in adverse ruling from AARs, taxpayers can approach the appellate authority. It, however, does not have any judicial members. In the absence of a national level appellate body, taxpayers have to take their pleas to the High Court.
“Setting up on a National AAAR to resolve concerns on such contrary orders is a brilliant move and where the said is adequately represented by judicial members, it may further foster the objective of this forum, and accordingly it should be set up without any further delay,” said Abhishek Jain, tax partner at EY.
Source: indiatimes.com
