Glossary · Compliance & Registrations
Advance Ruling
A binding written clarification obtained before or during a transaction that confirms how tax law applies to the applicant’s specific facts.
An advance ruling is a formal clarification that tells an applicant, in advance, how the law applies to a proposed or ongoing transaction, giving certainty on classification, applicability and taxability. Under GST, applicants approach the jurisdictional Authority for Advance Ruling (and, on appeal, the Appellate Authority); advance-ruling mechanisms have also applied to specified taxpayers under the income-tax framework. A ruling binds the applicant and the department for those facts.
Examples
An exporter seeks an advance ruling to confirm the classification and rate applicable to a newly launched product.