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Ministry of Finance
Department of Revenue
Authority for Advance Rulings
New Delhi |
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WHAT
IS THE SCHEME OF ADVANCE RULING? |
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With a view to avoiding a dispute in respect
of assessment of income-tax liability in the
case of a non-resident, a Scheme of Advance
Ruling has been introduced by incorporating
Chapter XIX-B in the Income Tax Act, 1961 by
the Finance Act, 1993. The Scheme now enables
the non-residents to obtain, in advance , a
binding ruling from the Authority for Advance
Rulings on issues which could arise in determining
their tax liabilities. Time-consuming and expensive
appeals can, thus ,be avoided. Such issues may
relate to transactions undertaken or proposed
to be undertaken by the non-resident applicant.
The Authority for Advance Rulings (Procedure)
Rules, 1996 provides detailed procedure for
obtaining advance ruling. |
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WHAT IS THE MECHANISM
FOR PRONOUNCING ADVANCE RULINGS? |
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The advance ruling
is required to be pronounced by an authority known
as the Authority for Advance Rulings, consisting
of a Chairman, who is a retired Judge of the Supreme
Court and two members of the rank of Additional
Secretary to the Government of India, one each
from the Indian Revenue Service and the Indian
Legal Service. |
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WHAT ARE THE BENEFITS
OF ADVANCE RULING? |
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Helps non-residents
in planning their income-tax affairs well in advance.
Brings certainty in determining the tax liability.
Helps avoiding long drawn and expensive litigation.
It is inexpensive, expeditious and binding. |
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WHO CAN SEEK ADVANCE
RULING ? |
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Any non-resident
person, whether individual, company, firm, association
of persons or other body corporates, can make
an application for seeking an advance ruling. |
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WHAT ARE THE QUESTIONS
ON WHICH ADVANCE RULING CAN BE SOUGHT ? |
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The advance ruling
can be sought on any question of law or fact specified
in the application in relation to a transaction
which has been undertaken, or is proposed to be
undertaken, by the non-resident applicant.
However, an advance ruling cannot be sought where
the question : is already pending in the case
of the applicant before any income tax authority,
the Appellate Tribunal or any court; or involves
determination of fair market value of any property;
or relates to a transaction which is designed
prima facie for avoidance of income-tax. |
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HOW TO SEEK ADVANCE
RULING? |
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The applicant may
seek advance ruling by making an application to
the Authority in the prescribed form i.e., Form
No.34C in the manner indicated below.
Form 34-C
Form 34-D
Form 34-E
Notification dated 21.6.99 |
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SIGNING OF APPLICATION |
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The application
including the documents annexed thereto shall
be signed in the manner indicated in Note 12 to
Form No.34 C. When a person signing the application
and other documents claims to have been duly authorised
to do so, the application must include a power
of attorney , authorising him to sign and an affidavit
setting out the unavoidable reasons which entitle
him to sign it. |
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AUTHORISED REPRESENTATIVE |
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The applicant is entitled to represent his case
before the Authority either personally or through
an authorised representative e.g., a Chartered
Accountant, Advocate, any other tax practitioner
etc. If the applicant desires to be represented
by an authorised representative, a duly authenticated
document authorising him to appear for the applicant
should be enclosed in original. |
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INSTANCES OF ISSUES
ON WHICH RULINGS CAN BE ASKED FOR |
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Application of Double Taxation Avoidance Agreements
(DTAAs) entered into by India and their use
in determination of tax liability of the residents
of the Contracting States, |
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Conflicts between DTAAs and domestic legislation
, |
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Taxation
problems in India of international partnerships, |
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Transfer of assets into and out of tax jurisdictions
vis-a-vis Indian taxation, |
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Consequences
of international acquisitions, business combinations,
mergers and demergers, |
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Taxation
of services, pensions, royalties, technical
fees and income from supply of labour, equipments
etc., |
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Taxation
of investment funds, venture capital funds,
offshore funds, financial instruments and derivatives,
cross border leasing , |
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Taxation
of income arising from international sea bed,
sea water and the space, |
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Taxation
of shareholders on distributed and undistributed
income of domestic and foreign companies, |
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Tax problems
relating to thin capitalisation, broadcasting
through satellites, etc., Problems relating
to with-holding of tax and accompanying penal
provisions, |
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PAYMENT OF FEE |
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The application should be accompanied by a fee
of Rs.2,500(two thousand five hundred Indian
rupees) through a bank draft in favour of the
'Authority for Advance Rulings' payable at New
Delhi. |
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WITHDRAWAL OF
APPLICATION |
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The applicant may withdraw his application within
30 days from the date of filing the application. |
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WHAT IS THE TIME
LIMIT FOR PRONOUNCING THE ADVANCE RULING? |
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The advance ruling is required to be pronounced
by the Authority within six months of the receipt
of a valid application. |
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IS ADVANCE RULING
BINDING? |
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Advance ruling pronounced by the Authority would
be binding in respect of the transaction(s)
in relation to which ruling has been sought
: on the commissioner and the income tax authorities
subordinate to him in respect of the applicant;
and on the applicant who had sought it. |
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CONFIDENTIALITY |
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The contents of the application would not be
disclosed to unauthorised persons. |
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WHERE TO GET ASSISTANCE? |
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Request for application forms may be sent to
:
The Commissioner of Income-tax
Authority for Advance Rulings
5th Floor, NDMC Building
Yashwant Place, Satya Marg, Chanakyapuri
New Delhi - 110 021
INDIA
Tel: 91-11-611 7792,91-11-611 7802,91-11-611
7935
FAX :91-11-611 3407
E-Mail : avipra@del2.vsnl.net.in
OR
at Post Box No.5300,New Delhi - 110 021 |