PROVISIONS OF FINANCE
ACT, 1994 ON ADVANCE RULINGS
CHAPTER V A OF FINANCE
ACT, 1994
ADVANCE RULINGS
SECTION 96A. Definitions. — In this Chapter,
unless the context otherwise requires,-
(a) “advance
ruling” means the determination, by the Authority, of a question of law
or fact specified in the application regarding the liability to pay service tax
in relation to a service proposed to be provided, by the applicant;
(b) “applicant”
means —
(i) (a) a non-resident setting up a joint venture in
(b) a resident
setting up a joint venture in
(c) a wholly
owned subsidiary Indian company, of which the holding company is a foreign company, who or which, as the case may be,
proposes to undertake any business activity in
(ii) a
joint venture in
(iii) a resident
falling within any such class or category of persons, as the Central Government
may, by notification in the Official Gazette, specify in this behalf,and which or who, as the case may be, makes
application for advance ruling under sub-section
(1) of section 96C;
Explanation. — For the purposes of this clause,
“joint venture in India” means a contractual arrangement whereby two or more
persons undertake an economic activity which is subject to joint control and
one or more of the participants or partners or equity holders
is a non-resident having substantial interest in such arrangement;
(c) “application”
means an application made to the Authority under sub-section (1) of section
96C;
(d) “Authority” means the
Authority for Advance Rulings, constituted under
sub-section (1),or authorised by the Central Government under sub-section (2A),
of section 28F of the Customs Act, 1962 (52 of 1962);
(e) “non-resident”,
“Indian company” and “foreign company” have the meanings respectively assigned
to them in clauses (30), (26) and (23A) of section 2 of the Income-tax Act,
1961 (43 of 1961);
(f) words and expressions used but not
defined in this Chapter and defined in the Central Excise Act, 1944 (1 of 1944)
or the rules made there under shall apply, so far as may be, in relation to
service tax as they apply in relation to duty of excise.
SECTION 96B. Vacancies, etc., not
to invalidate proceedings. — No proceeding before, or pronouncement of advance ruling by, the Authority under this Chapter
shall be questioned or shall be invalid on the ground merely of the existence
of any vacancy or defect in the constitution of the Authority.
SECTION 96C. Application for advance ruling. — (1) An applicant
desirous of obtaining an advance ruling under this
Chapter may make an application in such form and in such manner as may be
prescribed, stating the question on which the advance
ruling is sought.
(2) The question on which the advance ruling is sought shall be in respect of, -
(a) classification of
any service as a taxable service under Chapter V;
(b) the valuation of
taxable services for charging service tax;
(c) the principles to be adopted for the purposes of
determination of value of the taxable service under the provisions of Chapter
V;
(d) applicability of
notifications issued under Chapter V;
(e) admissibility of
credit of service tax.
(f) determination of the liability to pay service tax on a
taxable service under the provisions of Chapter V.
(3) The application shall be made in
quadruplicate and be accompanied by a fee of two thousand five hundred rupees.
(4) An applicant may withdraw an
application within thirty days from the date of the application.
SECTION
96D. Procedure
on receipt of application. — (1) On receipt of an application,
the Authority shall cause a copy thereof to be forwarded to the Commissioner of
Central Excise and, if necessary, call upon him to furnish the relevant records
:
Provided that where any
records have been called for by the Authority in any case, such records shall,
as soon as possible, be returned to the Commissioner of Central Excise.
(2) The Authority may, after examining the
application and the records called for, by order, either allow or reject the
application :
Provided that the Authority
shall not allow the application where the question raised in the application
is, -
(a) already pending
in the applicant’s case before any Central Excise Officer, the Appellate
Tribunal or any Court;
(b) the same as in
a matter already decided by the Appellate Tribunal or any Court :
Provided further that no
application shall be rejected under this sub-section unless an opportunity has
been given to the applicant of being heard :
Provided also that where the
application is rejected, reasons for such rejection shall be given in the
order.
(3) A copy of every order made under
sub-section (2) shall be sent to the applicant and to the Commissioner of
Central Excise.
(4) Where
an application is allowed under sub-section (2), the Authority shall, after
examining such further material as may be placed before it by the applicant or
obtained by the Authority, pronounce its advance ruling
on the question specified in the application.
(5) On a request received from the
applicant, the Authority shall, before pronouncing its advance
ruling, provide an opportunity to the applicant of being heard, either
in person or through a duly authorised representative.
Explanation. - For the purposes of this sub-section, “authorised
representative” has the meaning assigned to it in sub-section (2) of section
35Q of the Central Excise Act, 1944 (1 of 1944).
(6) The Authority shall pronounce its advance ruling in writing within ninety days of the
receipt of application.
(7) A
copy of the advance ruling pronounced by the
Authority, duly signed by the Members and certified in the prescribed manner
shall be sent to the applicant and to the Commissioner of Central Excise, as
soon as may be, after such pronouncement.
SECTION 96E. Applicability of advance ruling. — (1) The advance ruling pronounced by the Authority under section
96D shall be binding only -
(a) on the applicant
who had sought it;
(b) in respect of any
matter referred to in sub-section (2) of section 96C;
(c) on the Commissioner of Central Excise, and the Central
Excise authorities subordinate to him, in respect of the applicant.
(2) The advance ruling
referred to in sub-section (1) shall be binding as aforesaid unless there is a
change in law or facts on the basis of which the advance
ruling has been pronounced.
SECTION 96F. Advance
ruling
to be void in certain circumstances. — (1) Where the Authority finds, on a
representation made to it by the Commissioner of Central Excise or otherwise,
that an advance ruling pronounced by it under
sub-section (4) of section 96D has been obtained by the applicant by fraud or
misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the
provisions of this Chapter shall apply (after excluding the period beginning
with the date of such advance ruling and ending
with the date of order under this sub-section) to the applicant as if such advance ruling had never been made.
(2) A copy of the order made under
sub-section (1) shall be sent to the applicant and the Commissioner of Central
Excise.
SECTION 96G. Powers of Authority. — (1) The Authority
shall, for the purpose of exercising its powers regarding discovery and
inspection, enforcing the attendance of any person and examining him on oath,
issuing commissions and compelling production of books of account and other
records, have all the powers of a civil court under the Code of Civil
Procedure, 1908 (5 of 1908).
(2) The Authority shall be deemed to be a
civil court for the purposes of section 195, but not for the purposes of
Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974), and every
proceeding before the Authority shall be deemed to be a judicial proceeding
within the meaning of sections 193 and 228, and for the purpose of section 196
of the Indian Penal Code (45 of 1860).
SECTION 96H. Procedure of
Authority.
—
The Authority shall, subject to the provisions of this Chapter, have power to
regulate its own procedure in all matters arising out of the exercise of its
powers under this Act.
SECTION 96-I. Power of Central
Government to make rules. — (1) The Central Government may, by notification in the
Official Gazette, make rules for carrying out the provisions of this Chapter.
(2) In particular, and without prejudice
to the generality of the foregoing power, such rules may provide for all or any
of the following matters, namely :-
(a) the form and
manner for making application under sub-section (1) of section 96C;
(b) the manner of certifying a copy of advance
ruling pronounced by the Authority under sub-section (7) of section 96D;
(c) any other matter
which, by this Chapter, is to be or may be prescribed.
(3) Every
rule made under this Chapter shall be laid, as soon as may be, after it is
made, before each House of Parliament, while it is in session for a total
period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree
in making any modification in the rule or both Houses agree that the rule
should not be made, the rule shall thereafter have effect only in such modified
form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of
anything previously done under that rule.