Section 98 of the Central Goods and Services Tax (CGST) Act, 2017 deals with the procedure to be followed by the Authority for Advance Ruling after receiving an application for advance ruling.
Section 97 provides the mechanism for making an application, while Section 98 explains what happens after that application reaches the Authority. It covers forwarding the application to the concerned officer, calling for relevant records, examining the application, admission or rejection of the application, hearing the applicant and the concerned officer, and finally pronouncing the advance ruling.
The provision is therefore an important part of Chapter XVII – Advance Ruling under the CGST Act. CBIC also explains that Section 98 governs the procedure for dealing with an application for advance ruling.
What is Section 98 of the CGST Act?
Section 98 is titled “Procedure on receipt of application.”
The provision broadly establishes the following process:
Application received → Copy sent to concerned officer → Relevant records called for → Application examined → Admission or rejection → Hearing → Advance ruling
The Authority for Advance Ruling does not simply issue a ruling immediately after receiving an application. The application first goes through the statutory admission process prescribed under Section 98.
This is important because the law places restrictions on applications where the same question is already pending or has already been decided in specified proceedings in the applicant’s case.
Purpose of Section 98
The main purpose of Section 98 is to establish a structured procedure for dealing with advance ruling applications.
It allows the Authority to:
- Obtain the relevant records
- Examine the application
- Consider the position of the concerned officer
- Determine whether the application can be admitted
- Reject an application where the statutory restrictions apply
- Give the applicant and concerned officer an opportunity to be heard
- Pronounce the advance ruling after considering the matter
Thus, Section 98 acts as the procedural bridge between the application under Section 97 and the advance ruling issued by the Authority.
Section 98 and Section 97 – Difference
Sections 97 and 98 are closely connected but have different functions.
| Section 97 | Section 98 |
|---|---|
| Deals with application for advance ruling | Deals with procedure after receipt of application |
| Explains how an applicant applies | Explains how the Authority handles the application |
| Specifies questions on which ruling can be sought | Deals with admission, rejection and ruling |
| Application is made by applicant | Proceedings are conducted by Authority |
| FORM GST ARA-01 is relevant | Authority acts on the filed application |
Section 97 therefore answers “How does the applicant apply?”, while Section 98 mainly answers “What does the Authority do after receiving the application?”
Section 98(1) – Forwarding the Application and Calling for Records
After receiving an application under Section 97, the Authority is required to forward a copy of the application to the concerned officer and call for the relevant records.
This allows the tax administration to examine the question raised by the applicant and provide the Authority with the relevant information available with the department.
The records can be important because an advance ruling may concern a transaction that is already being undertaken by the applicant.
For example, an applicant may seek a ruling concerning:
- Classification of goods
- Applicability of a notification
- Input tax credit
- Tax liability
- Registration
- Whether an activity constitutes a supply
The concerned officer may have information or records relevant to determining the issue.
CBIC’s GST FAQ describes this process by stating that the Authority sends a copy of the application to the officer in whose jurisdiction the applicant falls and calls for relevant records.
Why Are Relevant Records Called For?
The purpose of obtaining records is to enable the Authority to consider the application along with the relevant factual and departmental information.
An advance ruling should be based on the facts and legal issue presented before the Authority.
For example, suppose a company asks whether a particular input service qualifies for ITC.
The Authority may need to understand:
- The nature of the service
- How the service is used
- The applicant’s business
- The relevant invoices
- Contractual arrangements
- Other facts relevant to the ITC question
Calling for records helps the Authority examine the issue within its actual factual context.
Section 98(2) – Examination of the Application and Records
Under Section 98, the Authority examines the application together with the records received from the concerned officer.
The Authority may also hear the applicant or the authorised representative and the concerned officer or the authorised representative before deciding whether the application should be admitted or rejected.
This provides an opportunity for both sides to present their position.
The process is therefore not intended to be a purely one-sided examination of the applicant’s written application.
Admission of an Advance Ruling Application
Admission is an important stage under Section 98.
An application that satisfies the statutory requirements can proceed toward an advance ruling.
However, the Act specifically provides circumstances in which the application shall not be admitted.
This prevents the advance ruling mechanism from being used to obtain a ruling on an issue that is already being dealt with in other proceedings involving the applicant.
When Must an Application Be Rejected?
Under Section 98, an application cannot be admitted where the question raised in the application is:
- Already pending in any proceedings in the applicant’s case under any of the provisions of the CGST Act; or
- Already decided in any proceedings in the applicant’s case under any provisions of the CGST Act.
CBIC’s GST FAQ specifically identifies these circumstances as grounds for compulsory rejection of the advance ruling application.
This restriction is important because an advance ruling is intended to provide certainty on qualifying questions and is not meant to become an alternative forum for matters already under adjudication.
Example of a Question Already Pending
Suppose a registered business is already involved in a GST proceeding concerning the classification of a particular product.
The business subsequently files an application for advance ruling asking the Authority to determine the classification of the same product in the same matter.
If the question is already pending in proceedings in the applicant’s case, Section 98 prevents the application from being admitted.
The advance ruling mechanism cannot be used to bypass an ongoing proceeding concerning the same question.
Example of a Question Already Decided
Suppose a GST authority has already decided a particular question in proceedings involving the applicant.
If the applicant subsequently approaches the Authority for Advance Ruling on the same question, the application cannot be admitted where the statutory condition in Section 98 applies.
The purpose is to avoid parallel proceedings and inconsistent determinations concerning the same applicant and question.
Opportunity of Being Heard Before Rejection
An important procedural safeguard is that an application cannot simply be rejected without giving the applicant an opportunity of being heard where the Authority proposes to reject it under the relevant provision.
This gives the applicant an opportunity to explain why the application should be admitted.
For example, if the Authority believes that the question is already pending in proceedings, the applicant may explain the factual or legal position before the Authority takes the final decision on admission.
This hearing requirement is an important part of procedural fairness under the advance ruling mechanism. CBIC’s GST FAQ also notes that rejection of an application is to be dealt with through an order and that the applicant is given an opportunity of being heard.
Order of Admission or Rejection
Where the Authority decides whether an application should be admitted or rejected, the decision is made through an order.
If the application is rejected, the reasons for rejection are relevant because the applicant needs to know why the Authority has not proceeded with the advance ruling application.
If the application is admitted, the Authority proceeds to examine the substantive question raised by the applicant.
This creates two distinct stages:
Stage 1 – Admission
The Authority determines whether the application can be considered.
Stage 2 – Advance Ruling
If admitted, the Authority considers the question and pronounces its ruling.
What Happens After Admission?
Once an application is admitted, the Authority proceeds to examine the question raised by the applicant.
The applicant and the concerned officer may be heard.
The Authority then considers:
- The facts of the transaction
- The question raised
- Relevant provisions of the CGST Act
- Applicable rules
- Notifications
- Records and documents
- Submissions of the applicant
- Submissions of the concerned officer
After completing this process, the Authority pronounces the advance ruling in writing.
Section 98(6) – Time Limit for Pronouncing Advance Ruling
Section 98 provides that the Authority shall pronounce its ruling in writing within 90 days from the date of receipt of the application.
This 90-day period is an important statutory timeline in the advance ruling mechanism. CBIC’s GST FAQ also confirms that the Authority has to pronounce its ruling in writing within ninety days from the date of receipt of the application.
The timeline can therefore be understood as:
Date of receipt of application → Maximum 90 days → Written advance ruling
The ruling is not merely an oral communication; it is pronounced in writing.
What Does the Written Ruling Contain?
An advance ruling is a formal written decision on the question raised by the applicant.
The ruling should deal with the specific question placed before the Authority and the applicable legal provisions and facts.
The Authority’s decision may address matters such as:
- Classification
- Applicability of a notification
- Time or value of supply
- Input tax credit
- Liability to pay tax
- Registration
- Whether an activity constitutes a supply
The ruling becomes relevant to the applicant in accordance with the binding-effect provisions contained in Section 103.
Communication of the Advance Ruling
After the Authority pronounces the advance ruling, copies are provided to the relevant persons as required under the Act.
The CGST Rules also provide for certification of copies of advance rulings pronounced by the Authority. Rule 105 provides that a copy of an advance ruling shall be certified as a true copy of the original by a member of the Authority for Advance Ruling.
The ruling is therefore a formal record of the decision of the Authority.
Section 98 and FORM GST ARA-01
The original application is made using FORM GST ARA-01 under Rule 104.
CBIC’s current published advance ruling rules state that an application under Section 97(1) is made on the common portal in FORM GST ARA-01 and is accompanied by a fee of ₹5,000.
Section 98 begins operating after this application has been received.
Therefore, the relationship can be shown as:
Section 97 → FORM GST ARA-01 → Section 98 → Advance Ruling
Role of the Concerned Officer
The concerned officer has an important role in the Section 98 procedure.
The Authority sends a copy of the application to the concerned officer and calls for relevant records.
The officer may therefore provide information and submissions concerning the question raised by the applicant.
This is particularly useful where the department has relevant records concerning the applicant’s GST activities.
The advance ruling process consequently allows the Authority to consider the position of both the applicant and the tax administration.
Applicant’s Right to Present Its Case
The applicant may be heard during the proceedings.
The applicant or authorised representative can explain:
- The factual background
- The nature of the supply
- The legal issue
- The interpretation of relevant GST provisions
- Supporting documents
- The applicant’s position on the question
This opportunity is particularly important where the Authority is considering rejecting the application or where there is a dispute concerning the scope or admissibility of the question.
Authorised Representative
An applicant may appear through an authorised representative where permitted under the GST law and applicable procedure.
The application itself and supporting documents must be signed in the prescribed manner.
CBIC’s published rules and advance ruling materials prescribe the signing requirements for applications and supporting documents.
The applicant should therefore ensure that the application is properly signed and supported by the required documents.
Section 98 and the Scope of the Question
The Authority does not have unrestricted jurisdiction to decide every possible GST issue merely because an applicant has filed an application.
The question must first fall within the categories specified in Section 97(2).
These include:
- Classification
- Applicability of notification
- Time and value of supply
- Admissibility of ITC
- Liability to pay tax
- Registration requirement
- Whether an activity constitutes a supply
Therefore, Section 97 determines the permitted subject matter, while Section 98 determines how the Authority deals with the application.
Section 98 and Proposed Supplies
An advance ruling can relate to a supply that is already being undertaken or is proposed to be undertaken.
CBIC’s GST FAQ confirms that an applicant may seek an advance ruling even before undertaking a transaction involving a proposed supply, subject to the statutory restrictions.
This makes the advance ruling mechanism potentially useful for businesses planning:
- New products
- New services
- New business models
- New contractual arrangements
- New pricing structures
- New transactions involving uncertain GST treatment
However, the question must still fall within Section 97(2), and the application must satisfy the requirements of Chapter XVII.
Section 98 and Existing Proceedings
One of the most important checks before filing an application is whether the same question is already part of proceedings involving the applicant.
The applicant should examine whether:
- A tax officer has already started proceedings on the question;
- The question has already been decided in proceedings involving the applicant; or
- The proposed advance ruling would overlap with an existing statutory proceeding.
If the question falls within the statutory restriction, the Authority cannot admit the application.
This makes a proper pre-filing review essential.
Section 98 and Natural Justice
The Section 98 procedure contains an important hearing requirement.
Where an application is proposed to be rejected on the statutory grounds, the applicant should be given an opportunity to be heard before the rejection order is passed.
The hearing allows the applicant to explain its position and address the Authority’s concerns.
This is particularly relevant where there is disagreement about whether the question is already pending or decided.
Section 98 and Appeal
If an advance ruling is issued and the applicant or concerned officer is aggrieved by it, the statutory appellate mechanism can become relevant.
Section 100 provides for an appeal to the Appellate Authority for Advance Ruling.
The CGST Rules prescribe:
- FORM GST ARA-02 for an appeal by the applicant, with a prescribed fee of ₹10,000; and
- FORM GST ARA-03 for an appeal by the concerned or jurisdictional officer, with no fee payable by that officer.
Therefore, the overall structure is:
Section 97 – Application
↓
Section 98 – Procedure and Advance Ruling
↓
Section 100 – Appeal
↓
Section 101 – Order of Appellate Authority
Section 98 and Section 103 – Binding Effect
Section 98 deals with the process of issuing the advance ruling, while Section 103 deals with its applicability.
An advance ruling is generally binding on the applicant who sought it and on the concerned or jurisdictional officer in respect of that applicant, subject to the conditions contained in the Act.
This means that an advance ruling obtained by one taxpayer does not automatically become a universally binding GST decision for every other taxpayer.
The factual circumstances and statutory provisions relevant to the ruling remain important.
Section 98 and Section 104 – Void Advance Ruling
Section 104 provides a separate safeguard where an advance ruling has been obtained through:
- Fraud;
- Suppression of material facts; or
- Misrepresentation of facts.
In such circumstances, the competent authority may declare the ruling void ab initio after giving the applicant or appellant an opportunity of being heard.
CBIC’s GST FAQ explains that where an advance ruling is obtained through fraud, suppression of material facts or misrepresentation, the ruling can be declared void and the GST provisions can then apply as if the ruling had never been made, subject to the statutory treatment of the relevant period.
This makes accurate disclosure of facts in an application particularly important.
Practical Example of Section 98
Suppose ABC Ltd. manufactures a specialised product.
The company is uncertain about its GST classification and files an advance ruling application under Section 97.
Step 1 – Application
ABC Ltd. submits FORM GST ARA-01 with the prescribed fee and relevant documents.
Step 2 – Copy to concerned officer
The Authority sends a copy of the application to the concerned officer and calls for relevant records.
Step 3 – Examination
The Authority examines the application and the available records.
Step 4 – Admission check
The Authority checks whether the classification question is already pending or decided in proceedings involving ABC Ltd.
Step 5 – Hearing
The applicant and concerned officer may be heard.
Step 6 – Ruling
If the application is admitted, the Authority considers the classification issue and pronounces its ruling in writing within the statutory period.
This example demonstrates how Section 98 operates after the application has been filed.
Practical Example of Rejection
Suppose XYZ Services Pvt. Ltd. has already received an order in proceedings concerning whether a particular service is taxable.
XYZ then files an advance ruling application asking the Authority to decide the same question.
If the question has already been decided in proceedings in the applicant’s case, Section 98 prevents the application from being admitted.
The advance ruling mechanism cannot be used to reopen the same issue through a separate proceeding.
Practical Example of a Proposed Transaction
Suppose a business plans to launch a new subscription-based service.
Before launching the service, it wants an advance ruling on whether the proposed activity constitutes a supply and what GST treatment applies.
If the question falls within Section 97(2) and the other statutory requirements are satisfied, the business may apply for an advance ruling.
The Authority can then examine the proposed transaction under Section 98.
CBIC has specifically clarified that advance ruling applications may relate to proposed supplies, provided the statutory restrictions are satisfied.
Practical Checklist for an Applicant
Before filing an advance ruling application, a taxpayer should consider the following:
Check the applicant’s eligibility
Confirm that the person qualifies as an applicant under Section 95.
Identify the exact question
Make sure the question falls within Section 97(2).
Check existing proceedings
Determine whether the same question is already pending or decided in the applicant’s case.
Prepare complete facts
Clearly explain the transaction, business model and relevant circumstances.
Collect supporting documents
Keep contracts, invoices, product specifications and other relevant documents ready.
File the prescribed application
Use FORM GST ARA-01 as prescribed under Rule 104.
Pay the prescribed fee
The current CBIC-published Rule 104 specifies a ₹5,000 application fee.
Be prepared for a hearing
The applicant may need to explain the question and supporting facts before the Authority.
Common Mistakes in Advance Ruling Applications
1. Asking a question outside Section 97(2)
Not every GST question can be taken to the Authority.
2. Ignoring pending proceedings
If the question is already pending in proceedings involving the applicant, the application may be barred from admission.
3. Re-asking a question already decided
Section 98 prevents admission where the question has already been decided in proceedings in the applicant’s case.
4. Providing incomplete facts
The Authority needs a clear understanding of the actual or proposed transaction.
5. Giving inconsistent information
The facts stated in the application should be accurate and consistent with supporting records.
6. Treating an advance ruling as universal clarification
An advance ruling generally operates within the statutory binding framework applicable to the applicant and concerned/jurisdictional officer.
7. Failing to retain supporting records
Documents submitted to the Authority should be preserved properly because they form part of the factual basis of the proceedings.
Important Forms Related to Section 98
| Form | Purpose |
|---|---|
| FORM GST ARA-01 | Application for advance ruling |
| FORM GST ARA-02 | Appeal by applicant against advance ruling |
| FORM GST ARA-03 | Appeal by concerned/jurisdictional officer |
| Advance ruling | Written decision of Authority |
| Appellate Authority ruling | Decision at appellate stage |
The CGST Rules prescribe FORM GST ARA-01 for applications and FORM GST ARA-02/ARA-03 for appeals.
Section 98 – Key Points at a Glance
| Point | Explanation |
|---|---|
| Section | 98 |
| Chapter | XVII – Advance Ruling |
| Subject | Procedure on receipt of application |
| Application originates under | Section 97 |
| Initial action | Copy sent to concerned officer |
| Records | Relevant records may be called for |
| Admission | Authority examines whether application can be admitted |
| Rejection | Mandatory where statutory restrictions apply |
| Hearing | Applicant and concerned officer may be heard |
| Ruling | Pronounced in writing |
| Time limit | 90 days from receipt of application |
| Appeal | Section 100 |
| Binding effect | Section 103 |
| Void ruling | Section 104 |
Section 98 vs Section 97 vs Section 100
| Provision | Main subject |
|---|---|
| Section 97 | Application for advance ruling |
| Section 98 | Procedure after receipt of application and advance ruling |
| Section 100 | Appeal against advance ruling |
These provisions represent three different stages of the advance ruling process.
Section 97: The applicant asks.
Section 98: The Authority examines and decides.
Section 100: An eligible aggrieved party may appeal.
Why Section 98 Is Important
Section 98 provides the procedural structure that turns an application into a formal advance ruling proceeding.
It ensures that the concerned tax officer gets an opportunity to provide relevant records and information. It also prevents the Authority from admitting applications concerning questions that are already pending or have already been decided in specified proceedings involving the applicant.
The provision also establishes the statutory 90-day period for pronouncing the ruling once the application has been received.
For taxpayers, understanding Section 98 is therefore important not only for filing an advance ruling application but also for understanding what happens after the application is submitted.
👉 Read More → Section 99 – Appellate Authority for Advance Ruling
Conclusion
Section 98 of the CGST Act, 2017 lays down the procedure to be followed by the Authority for Advance Ruling after receiving an application under Section 97.
The Authority forwards the application to the concerned officer, calls for relevant records and examines the application along with those records. The application is subject to statutory admission requirements, and it cannot be admitted where the question raised is already pending or has already been decided in proceedings in the applicant’s case.
Where the application proceeds, the applicant and the concerned officer may be heard before the Authority reaches its decision. Section 98 further provides that the Authority shall pronounce its ruling in writing within 90 days from the date of receipt of the application.
Section 98 should therefore be read together with Section 97, which deals with the application, Section 100, which provides the appellate mechanism, Section 103, which deals with the applicability of an advance ruling, and Section 104, which deals with an advance ruling obtained through fraud, suppression of material facts or misrepresentation.
Understanding this procedure helps taxpayers know what happens after FORM GST ARA-01 is filed and how an advance ruling moves from application and admission to a formal written decision.
Frequently Asked Questions About Section 98 of the CGST Act
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
Why Choose Sarkari Bakery?
Official Information
Government schemes & banking information based on official sources.
Step-by-Step Guides
Simple application process explained for every service.
Regular Updates
Content updated whenever official rules or services change.
People-First Content
Helpful, transparent and user-focused content.