In response to my last week's article on Advance Rulings (Customs) Rules, 2002, quite a few readers have raised some questions. I will try to answer some of them here.
The first question is whether there is a similar provision for advance ruling on excise matters. I understand that the Central government has notified the Advance Rulings (Excise) Rules, 2002 also on the same date when similar rules were notified for Customs matters. The rules for excise are very similar to rules applicable in Customs matters that I explained last week.
The second question relates to why the facility of getting advance rulings is restricted only to joint ventures. Frankly, I do not know the reason. I see no reason why such a facility should be denied to residents.
Maybe, if somebody alleges discrimination between residents and non-residents, the courts might direct that the rules must be extended to all. I would, however, be happy to see the ministry communicate to the trade the reasons as to why the facility is denied to residents. The trade associations also can push the government to allow residents to take advantage of advance rulings facility.
The third question is whether the Advance Ruling Authority is constituted. In April this year, the government issued a notification appointing K Venkataswamy, a retired judge of the Supreme Court, as the chairman of the Advance Ruling Authority.
The other member appointed is none other than R K Chakravarty, member (legal and administration), Central Board of Excise and Customs.
The third member is not yet appointed, as the law ministry is yet to nominate any person from the Indian legal service who is qualified to be an additional secretary.
The fourth question is whether an application can now be made and by when the advance ruling can be expected. I see no problem in filing the application as per the rules recently notified. But, whether an answer will come forth quickly is anyone's guess. First of all, the third member is not yet appointed. Moreover, the Advance Ruling Authority is yet to frame fules for conduct of its own affairs.
I understand that the groundwork to notify the rules for conduct of its business by the Advance Ruling Authority has already been done and that the notifications would soon follow. Even plans to print the brochures and distribute the same to trade associations are ready. All this should be over in a few weeks.
The fifth question is whether any similar provision is in store for service tax because that is also an area where many would benefit by taking advance ruling. The answer is that there is no similar facility yet in place for service tax. It is up to the trade associations to demand advance ruling facility in respect of service tax also.
In my article last week, I had mentioned that a joint venture company can get a ruling on classification, applicability of exemptions and principles of valuation even before starting the import or export activity. That is not a restriction.
Advance rulings can be sought any time, even after commencement of activity. The ruling should not be sought on any matter that is already pending before any officer or tribunal or courts and the matter should not have been decided by any tribunal or court. That is all.
