Many individuals want to start a new business or retain the existing business in the market, but they don’t know about their venture and its risks.
The entrepreneur needs to get a clear knowledge about taxation matters before he decides to maintain. Clarity about the taxation matters for the business is a must. Otherwise, they may be exposed to certain unexpected events and risks which may have adverse consequences on their
business.
Hence, to get ride out from this matter and gain investor confidence, the clarification of certain tax matters a provision of the advance ruling was made in income tax in 1993 vide section 245N to 245R issued by the Authority for advance ruling (AAR).
In Income tax, the advance ruling is available in international taxation. Under GST, the advance
ruling is a written decision by the tax authorities to an applicant on questions relating to
the supply of goods/services.
Hence, the overall objective of the advance ruling is to provide certainty to the applicant,
and it also ensures that disputes are minimized. Advance Ruling can even increase the
scope of interpretation of the law and for the benefit of the applicant to file an advance ruling for planning in case the transactions being undertaken or to be undertaken are
complex and involve huge capital investment.
