GST has become the bread and butter of every economic activity in the nation. One has to always come face to face with the taxations on goods and services. It has thus led to the rise in GST Registrations. In certain cases, one gets confused as to what tax to pay and how to go about it.

There are certain provisions under the Income Tax Act where the individual is provided with a legal stand. It helps in understanding the taxation policy and file for the returns in the right manner. It aims to provide a legal procedure for GST Return filing, when a person does not know what to file for and what to include in the filing.

What is Advance Ruling in GST?

An advance ruling is a ruling under the tax law where an individual can file for clarification of tax-related matters. An advance ruling is often filed by individuals who are confused and uncertain in terms of provisions under the tax law. It is generally filed before an action is taken regarding a certain financial decision. 

An advance ruling is designed to help an individual in planning in advance their activities which are liable to tax payments. It helps bring a sense of certainty and transparency in the taxation methods. It helps determine the liability of taxes of individuals. It also aims to help avoid long-drawn litigation which can sometimes get expensive. It also helps avoid the potential causes of a dispute with the tax administration. 

Advance Ruling plays an important role in the payment of online GST as it requires to be sorted as to what amount of tax one has to pay. Thus filing for an Advance ruling helps, decide the amount and provides clarity.

How does Advance ruling help businesses?

Advance Ruling has a lot of advantages for people who are confused with the taxation policy for certain cases. It helps them clarify their doubts and resolve tax-related issues. When a business proceeding is in process and one has doubts filing an advance Ruling helps solve the issue. One can not file for an Advance Ruling once the transaction or activity is done. 

Advance Ruling is applicable only when the process is underway. It helps in the correct GST Return Filing when required. It can not be filed once the transaction of the business is over. Thus the time to file for an advance ruling is while the transaction is in process.

Conclusion

The law has made provisions for a comprehensive advance ruling to help reduce disputes in taxation. The advance ruling is time-based and thus it needs to be done within a specific amount of time. It aims to provide a sense of certainty to the taxpayer in regards to their obligation towards GST. 

It helps for a smoother engagement between the taxpayer and the authorities when the matter is resolved through the right process. to his obligations under the GST Act and an expeditious ruling so that the relationship between the taxpayer and administration is smooth and transparent and helps to avoid unnecessary litigation.