1. Why Section 97 matters
Section 97 answers two practical questions: how do I seek an advance ruling, and what can I ask AAR to decide?
The section is important because the advance-ruling mechanism is not an open-ended tax consultation service. Parliament has specified the categories of questions that can be put before the Authority.
2. What people actually search for
3. Section 97 in simple language
Suppose a business is about to enter into a large contract. It is uncertain whether the transaction is taxable, whether a notification applies, whether ITC is available or how the supply should be classified.
If the issue falls within Section 97(2), the business can ask the Authority for Advance Ruling for a statutory ruling.
Section 97 has two parts:
How the applicant makes the application.
The seven categories of questions that may be asked.
4. Complete statutory structure
| Provision | What it does |
|---|---|
| 97(1) | Allows an applicant desirous of obtaining an advance ruling to apply in the prescribed form and manner, with prescribed fee, stating the question on which the ruling is sought. |
| 97(2)(a) | Classification of goods or services or both. |
| 97(2)(b) | Applicability of a notification issued under the Act. |
| 97(2)(c) | Determination of time and value of supply of goods or services or both. |
| 97(2)(d) | Admissibility of input tax credit of tax paid or deemed to have been paid. |
| 97(2)(e) | Determination of liability to pay tax on goods or services or both. |
| 97(2)(f) | Whether the applicant is required to be registered. |
| 97(2)(g) | Whether a particular thing done by the applicant with respect to goods or services amounts to or results in a supply. |
These seven categories are the central legal boundary of the advance-ruling application.
5. How to apply for an advance ruling
Section 97(1) says the applicant may make an application in the prescribed form and manner, accompanied by the prescribed fee, and must state the question on which the ruling is sought.
In practical terms, the applicant should not begin with a long legal argument. Begin with a precise factual question.
The prescribed procedure is completed through the common portal under the advance-ruling rules.
6. Form ARA-01 and fee
Rule 104 prescribes Form GST ARA-01 for an application for advance ruling. The prescribed fee is ₹5,000, deposited in the manner specified under Section 49.
The application, verification and accompanying documents must also be signed in the prescribed manner.
7. Question 1 — Classification of goods or services
Section 97(2)(a) permits a question about classification of goods or services or both.
Classification matters because the tariff classification or service classification can affect the applicable GST rate, exemption, reporting and compliance treatment.
Example
A manufacturer develops a specialised industrial product with several possible tariff headings. If the applicant has a qualifying transaction and wants an advance ruling on classification, Section 97(2)(a) is the relevant category.
8. Question 2 — Applicability of a GST notification
Section 97(2)(b) covers the applicability of a notification issued under the Act.
This is useful where a taxpayer knows the relevant notification but is uncertain whether the facts satisfy its conditions.
Example
A contractor believes a specified concessional rate notification applies to its project but is unsure whether its contract satisfies every condition. The question can be framed around applicability of that notification.
9. Question 3 — Time and value of supply
Section 97(2)(c) covers determination of the time and value of supply.
This connects the advance-ruling process with provisions such as Sections 12, 13, 14 and 15.
Time of supply example
A complex continuous-service contract has multiple milestones, invoices and payment triggers. The applicant may frame a qualifying question on the applicable time-of-supply rule.
Value of supply example
A related-party or bundled arrangement creates uncertainty regarding taxable value. The applicant can examine whether the issue falls within Section 97(2)(c).
10. Question 4 — Admissibility of ITC
Section 97(2)(d) covers the admissibility of input tax credit of tax paid or deemed to have been paid.
This is particularly important for businesses with significant capital expenditure, common services, construction projects, specialised equipment and complex input arrangements.
Example
A business incurs GST on a specified inward service and wants to know whether the ITC is legally admissible. The question should be framed around the particular inward supply and relevant ITC provisions.
11. Question 5 — Liability to pay tax
Section 97(2)(e) permits a question concerning the liability to pay tax on goods or services or both.
This is broader than simply asking the rate. It can involve whether the applicant is legally liable to pay GST on the specified supply, subject to the boundaries of the advance-ruling framework.
Example
A company enters into a specialised arrangement where the parties are uncertain whether the applicant itself has the GST liability. A precisely framed liability question may be considered under this category.
12. Question 6 — Whether registration is required
Section 97(2)(f) permits a question on whether the applicant is required to be registered.
This is different from asking whether every supplier in the industry needs registration. The question is linked to the applicant's own facts.
Example
A business has several types of revenue and is uncertain whether its particular activities make it liable for GST registration. The application should set out the actual supplies and turnover facts.
13. Question 7 — Whether an activity is a supply
Section 97(2)(g) covers whether a particular thing done by the applicant with respect to goods or services amounts to or results in a supply.
This is especially useful where the business is uncertain whether a transaction or activity falls within the statutory concept of supply.
Examples
The exact facts must be examined under Section 7 and related provisions.
14. How to frame the question correctly
The quality of an advance-ruling application often depends on how precisely the question is framed.
| Weak question | Better question |
|---|---|
| “What GST applies to our company?” | “Whether the described supply of [specific goods/services] is covered by [specific notification/classification provision]?” |
| “Can we claim ITC?” | “Whether ITC of GST paid on [specific inward supply] is admissible under the applicable provisions, based on the stated use?” |
| “Is our project taxable?” | “Whether the described supply under the identified contract attracts GST and what is the applicant's liability to pay tax?” |
| “Do we need GST registration?” | “Whether the applicant carrying out the stated activities and supplies is required to obtain registration under the applicable provisions?” |
15. Undertaken vs proposed supply
Section 95 defines advance ruling in relation to a supply being undertaken or proposed to be undertaken by the applicant. Section 97 then provides the application mechanism.
Therefore, the factual description should clearly explain whether the applicant is already carrying out the transaction or is proposing to undertake it.
Explain the existing contract, invoices, activity and current GST treatment.
Explain the proposed contract, commercial model, consideration and expected activity.
16. What happens after filing?
Section 98 governs the next stage. The Authority forwards the application to the concerned officer and may call for records.
The Authority can examine the application and records and, after hearing the applicant/authorised representative and concerned officer/representative, admit or reject the application.
If admitted, the Authority proceeds to hear the matter and pronounce the ruling in accordance with the Act.
17. Construction and infrastructure examples
Works contract classification
A construction company wants clarity on the classification of a specialised contract. Section 97(2)(a) may be relevant.
Notification for government project
A contractor believes a particular rate notification applies to a government project. Section 97(2)(b) may provide the appropriate question category.
RA bill and time of supply
A long-term project has milestones, running account bills, certification and payment stages. A qualifying time-of-supply question can be considered under Section 97(2)(c).
Project ITC
A project company has a significant inward supply and wants clarity on ITC admissibility. Section 97(2)(d) may be relevant.
Subcontract arrangement
The parties are uncertain which person has the tax liability under a particular structure. Section 97(2)(e) may be relevant.
18. Detailed practical cases
Case 1 — Product classification
Manufacturer seeks a ruling on tariff classification. Section 97(2)(a).
Case 2 — Service classification
Service provider seeks classification of a specialised service. Section 97(2)(a).
Case 3 — Exemption/rate notification
Contractor wants to know whether a specified notification applies. Section 97(2)(b).
Case 4 — Time of supply
Continuous service has multiple billing/payment milestones. Section 97(2)(c).
Case 5 — Valuation
Complex consideration structure requires determination of taxable value. Section 97(2)(c).
Case 6 — ITC
Business wants clarity on admissibility of ITC on a specific inward supply. Section 97(2)(d).
Case 7 — Tax liability
Parties disagree about who is liable to pay GST. Section 97(2)(e).
Case 8 — Registration
Business is unsure whether its own activities require registration. Section 97(2)(f).
Case 9 — Supply or not
Business wants to know whether a specific activity constitutes a supply. Section 97(2)(g).
Case 10 — Multiple questions
A complex project may involve classification, notification and ITC questions. Each question should be separately and clearly mapped to Section 97(2).
Case 11 — Broad question
Applicant asks AAR to review the entire tax position of its business. The application should be narrowed to statutory questions.
Case 12 — Existing dispute
Before filing, the applicant should carefully examine whether the statutory advance-ruling framework permits the question in the circumstances and whether any other proceedings affect maintainability.
19. Important limitations
20. Professional preparation workflow
Document the exact goods/services.
Confirm registration status/intention.
Write the commercial uncertainty.
Select the correct statutory category.
Contracts, invoices, agreements and process.
Act, Rules and notifications.
Make it precise and answerable.
Attach documents and pay fee.
Keep arguments aligned with facts.
Consider appeal if required.
21. Documents checklist
22. Common mistakes
- Asking a question outside Section 97(2).
- Writing a broad business-wide question.
- Not identifying the exact supply.
- Failing to distinguish time of supply from value of supply.
- Asking an ITC question without describing actual use.
- Ignoring the specific notification conditions.
- Providing incomplete contractual facts.
- Assuming filing automatically means admission.
- Using AAR as a substitute for an appeal against an existing assessment.
- Failing to review current Rules and prescribed forms before filing.
23. Legislative development
24. Binding effect and appeal
Section 97 is only the application gateway. After the AAR ruling, Sections 100 and 103 become important.
Provides the appeal mechanism against an AAR ruling, subject to the statutory conditions.
Determines who is bound by an advance ruling.
An AAR ruling should therefore be read together with the exact applicant, facts and statutory question. It should not automatically be treated as a general nationwide interpretation for every taxpayer.
25. Section 97 GST FAQs
What is Section 97 of the CGST Act?
Section 97 deals with the application for advance ruling and specifies the questions on which an advance ruling may be sought.
What is Form ARA-01?
Form GST ARA-01 is the prescribed form for an original advance-ruling application.
What is the fee for ARA-01?
Rule 104 prescribes a ₹5,000 fee for the application.
How many questions can AAR decide under Section 97(2)?
There are seven statutory categories, from classification through whether a particular activity constitutes a supply.
Can I ask about GST classification?
Yes. Classification of goods or services is specifically covered by Section 97(2)(a).
Can I ask whether a GST notification applies?
Yes. Applicability of a notification issued under the Act is covered by Section 97(2)(b).
Can AAR decide time of supply?
Yes. Section 97(2)(c) includes determination of time and value of supply.
Can AAR decide ITC eligibility?
Yes. Admissibility of ITC of tax paid or deemed to have been paid is covered by Section 97(2)(d).
Can I ask who is liable to pay GST?
Yes, a qualifying question on liability to pay tax is covered by Section 97(2)(e).
Can AAR decide whether GST registration is required?
Yes. Section 97(2)(f) specifically covers whether the applicant is required to be registered.
Can AAR decide whether an activity is a supply?
Yes. Section 97(2)(g) covers whether a particular thing done by the applicant amounts to or results in a supply.
Does filing ARA-01 guarantee a ruling?
No. The Authority examines the application and may admit or reject it under the procedure in Section 98.
Can I ask any general GST question?
No. The question must fall within the statutory categories in Section 97(2).
Can a proposed transaction be taken to AAR?
The advance-ruling definition covers a supply being undertaken or proposed to be undertaken by the applicant, subject to the other statutory requirements.
Is AAR advice the same as a consultant's opinion?
No. AAR is a statutory authority and an advance ruling is a statutory decision.
27. Key takeaways
- Section 97 is the practical entry point for a GST advance-ruling application.
- Section 97(1) covers the application, prescribed form, manner and fee.
- Rule 104 prescribes Form GST ARA-01 and a ₹5,000 fee.
- Section 97(2) contains seven permitted categories of questions.
- Classification is covered.
- Notification applicability is covered.
- Time and value of supply are covered.
- ITC admissibility is covered.
- Liability to pay tax is covered.
- Registration requirement is covered.
- Whether an activity constitutes a supply is covered.
- The strongest applications begin with a precise factual question mapped to the correct Section 97(2) clause.
Disclaimer: This guide is for practical educational use. Advance-ruling applications are fact-specific. Verify the current CGST Act, Rules, applicable notifications and procedural requirements before filing.