2 more Benches for advance I-T rulings

The Benches will be in New Delhi and Mumbai. Currently, there is only one such Bench, in Delhi

The Cabinet on Wednesday cleared the setting up of two more Benches of the Authority for Advance Rulings (AAR), a move that will allow domestic companies to seek income tax liability advice in advance.

Companies can obtain binding rulings from the authority on matters arising out of any transaction/proposed transaction for determining tax liabilities.

This comes amid a huge backlog of tax cases and the Supreme Court’s recent move to constitute a special Bench to hear pending disputes.

The two additional Benches will be located in New Delhi and Mumbai. Currently, there is only one such Bench, in Delhi.

“The creation of two additional Benches of the authority will help dispose an increased number of cases and the pendency of cases will be reduced, benefiting the taxpayer and the government,” read an official statement. It added this would also operationalise the facility of advance rulings for resident taxpayers.

With Wednesday’s decision, two posts of vice-chairmen, four posts of members and two posts of secretary will be created. The Benches will be set up at a cost of Rs 7.48 crore and an additional annual recurring cost of Rs 6.61 crore will be incurred on running these.

Neeru Ahuja, partner, Deloitte Haskins & Sells, said the Cabinet’s decision would give certainty on taxes to domestic companies, which could apply to AAR for determination of their tax liabilities.

The Budget had announced the creation of additional Benches and an extension of the facility of advance rulings for foreign companies and public sector undertakings to resident companies. “I propose to strengthen the Authority for Advance Rulings by constituting additional Benches,” Finance Minister Arun Jaitley had said in his Budget speech.