Kolkata: The West Bengal Appellate Authority for Advance Ruling has reaffirmed that the advance ruling mechanism under GST law is intended to provide certainty only for proposed or ongoing transactions, and cannot be used as a substitute for adjudication of completed transactions involving disputed questions of fact.
The ruling, issued by SGST chief commissioner Khaled Anwar and CGST chief commissioner S Naik, has drawn attention in GST circles for its emphasis on the jurisdictional limits of the advance ruling framework.
GST experts said the decision would effectively block attempts to use the mechanism to avoid penalties on past transactions. “People are coming up with new techniques to avoid penalties. This ruling would effectively block that,” said one expert, adding that without this check, the state exchequer could face revenue losses.
The appellate authority held that questions such as whether an amount received under an arbitral award constitutes additional consideration, damages, compensation, reimbursement, interest or any other contractual entitlement require detailed examination of facts and evidence — an exercise that falls within the domain of the jurisdictional proper officer and not within advance ruling proceedings.