Advance rulings can now be sought by e-mail
Premium- CBDT has notified the ‘e-advance rulings scheme, 2022’ taking the ‘faceless’ approach to tax administration to advance ruling provisions too
NEW DELHI : Businesses can now seek rulings from the Board for Advance Rulings by email to clarify legal positions before entering into transactions, showed an official order.
The Central Board of Direct Taxes (CBDT) has notified the ‘e-advance rulings scheme, 2022’ taking the ‘faceless’ approach to tax administration to advance ruling provisions too.
Advance ruling are written opinions or authoritative decision by an authority empowered to give it regarding tax consequences of transactions including proposed ones. In the Finance Act 2021, the government made provisions to set up one or more such Boards for giving advance rulings, replacing the Authority for Advance Rulings (AAR).
The idea of replacing AAR with BAR is to quicken the disposal of cases. Appeals against orders of BAR can be filed in High Courts. Every such Board is to consist of two members not below the rank of Chief Commissioner. Such Boards have already been set up in Delhi and Mumbai.
As per the e-advance rulings scheme, the request for rulings will be randomly assigned to the Board through an automated allocation system. Non-residents, residents planning transactions with non-residents and notified public sector companies are among the entities eligible for seeking advance rulings.
The scheme is meant to cutting short personal interaction between the income tax department and taxpayers. It says that hearing before the Board will be held through video conferencing and all communication between the Board and the taxpayer or the income tax authorities will take place in electronic mode. Considering majority of applicants for an advance ruling are non-residents, the e-advance ruling scheme would help non-resident applicants participate in these proceedings without having to travelling for it, explained Rakesh Nangia, chairman of Nangia Andersen India, a consultancy. “However, implementation will be key to success of the scheme and the authorities would need to ensure that adequate opportunity of hearing, albeit through video conferencing, is provided to the applicants," said Nangia.
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