Customs

1.For persons who wish to be clear on tax liabilities before venturing into a particular taxable activity, a statutory mechanism has been provided in the form of Advance Rulings. As the name suggests, it is sought and given before the commencement of a particular activity and it is a ‘ruling’ i.e. it is in the nature of an order binding the parties involved. For this purpose, Authority for Advance Rulings (Common for both direct and indirect taxes) has been established.

2. Persons eligible to seek Advance Ruling:

(a) Any person who is a non-resident setting up a joint venture in India in collaboration with a non-resident or a resident.

(b) Any person who is a resident setting a joint venture in India in collaboration with a non-resident.

(c) A wholly owned subsidiary Indian Company of which the holding company is a foreign company.

(d) A joint venture in India.

(e) A resident falling within any class or category of persons as the Central Government may notify.

(f) Public sector undertakings in India.

(g) A resident who proposes to import goods claiming assessment under Heading 9801 of Customs Tariff (Project Imports).

(3) Advance Ruling can be sought on:

(a) Classification of goods under the Customs Tariff Act, 1975.

(b) Applicability of notifications issued under Section 25(1) of Customs Act, 1962 having a bearing on the rate of duty;

(c) Principals of valuation under the Customs At, 1962;

(d) Applicability of notification issued in respect of duties under the Customs Act, 1962, Customs Tariff Act 1975 and any duty chargeable under any other law in force in the same manner as duty of customs leviable under the Customs Act;

(e) Determination of origin of the goods in terms of the rules notified under the Customs Tariff Act 1975 and related matters.

4. Application for Advance Ruling:- Application for advance ruling shall be made in form AAR(CUS) (see Customs Series Form No.122) in quadruplicate. The prescribed application fees is Rs.2,500 payable by demand draft. The Advance Rulings Authority shall pronounce the ruling within 90 days of receipt of application. Opportunity of hearing is provided before rulings are pronounced and other judicial principles are observed. Advance Rulings pronounced by the Authority are binding on the applicant and the jurisdictional departmental officers of the applicant in respect of the mater on which the ruling has been pronounced. A comprehensive official write up on the scheme is available at 2006 (199) E.L.T. T13.