1. Why Section 98 matters
Section 97 tells you how to apply. Section 98 tells you what AAR does with that application.
Filing Form ARA-01 is not the end of the process. The Authority first examines the application, obtains records where necessary, considers whether the application can be admitted, and then follows the hearing and ruling process.
2. What people actually search for
3. Section 98 in simple language
Imagine a business files an advance-ruling application asking whether its proposed service is taxable.
AAR does not simply issue an answer immediately. It first sends the application to the concerned officer, may call for records, examines the application, and determines whether the application should be admitted or rejected.
If admitted, the applicant and the concerned officer get an opportunity to be heard. The Authority then pronounces its ruling.
4. Complete statutory structure
| Provision | What it does |
|---|---|
| 98(1) | Application is forwarded to the concerned officer; Authority may call for relevant records and must return records called for as soon as possible. |
| 98(2) | After examining the application/records and hearing the parties, Authority may admit or reject the application. |
| 98(3) | Application cannot be admitted where the question raised is already pending or decided in proceedings under the Act for the applicant, subject to the statutory wording. |
| 98(4) | Where application is admitted, Authority shall pronounce its ruling after examining material and hearing the applicant/representative and concerned/jurisdictional officer/representative. |
| 98(5) | Ruling shall be pronounced in writing and copies communicated to the applicant, concerned officer and jurisdictional officer. |
| 98(6) | Authority shall pronounce the ruling within six months from the date of receipt of the application. |
This structure makes Section 98 the central procedural provision for the original AAR stage.
5. Step 1 — Application reaches AAR
The process begins with the application under Section 97(1).
The application should state the question on which the ruling is sought and comply with the prescribed form, manner and fee. Rule 104 prescribes Form GST ARA-01 and the application fee framework.
6. Step 2 — Records from the concerned officer
Section 98(1) requires the Authority to forward a copy of the application to the concerned officer and permits the Authority to call for relevant records.
This is important because AAR is not supposed to decide a complicated tax question in isolation from the department's relevant records.
For example, if the application concerns an existing registration, classification, notification or tax treatment, records maintained by the jurisdictional/concerned officer may help the Authority understand the factual and procedural background.
7. Step 3 — Admission or rejection
After examining the application and records and after hearing the applicant or authorised representative and the concerned officer or authorised representative, the Authority may admit or reject the application.
This is a crucial distinction:
The Authority does not proceed to a ruling on the substantive question through the admitted-application process.
The matter proceeds through the advance-ruling hearing and ruling stage.
8. Pending or already decided proceedings — critical rule
One of the most important limitations is that an advance-ruling application cannot be admitted where the question raised is already pending or decided in proceedings in the applicant's case under the GST law, subject to the exact statutory conditions.
This prevents the advance-ruling mechanism from being used as a parallel route to obtain another decision on a matter already before the department or other statutory process.
9. Hearing before AAR
Once the application is admitted, Section 98(4) provides for hearing of the applicant or authorised representative and the concerned/jurisdictional officer or authorised representative.
The hearing is important because the AAR needs to test both sides of the factual and legal position.
Applicant should be ready to explain
10. Order of AAR
Where the application is admitted, the Authority pronounces its advance ruling in writing.
The ruling should be read carefully. The answer is connected to the exact question, facts and statutory framework presented before the Authority.
A good finance team should retain the complete ruling, application, annexures, hearing submissions and supporting documents together. The application itself is important because the binding effect under Section 103 is linked to the applicant and the matter for which the ruling was sought.
11. Six-month ruling timeline
Section 98(6) provides that the Authority shall pronounce the ruling within six months from the date of receipt of the application.
This is the statutory timeline for the original AAR ruling. It should not be confused with the time limits for filing an appeal after the ruling.
12. CGST and SGST/UTGST AAR process
The advance-ruling framework works through corresponding CGST and State/UT GST provisions. The same transaction can therefore involve the Central and State/UT tax perspectives.
The application process and statutory fee should be checked carefully under both applicable laws and the prescribed filing procedure.
13. Why GST AAR applications get rejected
Rejection can occur for procedural or statutory reasons. Some common categories seen in current AAR records include:
| Issue | Why it matters |
|---|---|
| Question already pending/decided | Advance ruling cannot become a parallel adjudication route. |
| Question outside Section 97(2) | AAR jurisdiction is limited to specified questions. |
| Incorrect filing procedure | Prescribed application procedure must be followed. |
| Fee not properly paid | Application fee is part of the statutory filing requirements. |
| Insufficient factual foundation | AAR needs the transaction and facts clearly established. |
| Existing departmental proceedings | The same question may create a statutory admission bar. |
14. 2026 practical examples of rejection
Current GST Council records demonstrate that Section 98(2) is not merely theoretical.
In 2026, AAR orders include applications rejected under Section 98(2) for failure to comply with prescribed manual filing requirements and/or application-fee requirements. These records are a useful practical warning: a technically strong tax question can still fail if the application is not procedurally completed.
For example, recent Tamil Nadu AAR records include March and April 2026 matters rejected under Section 98(2) because the prescribed manual application was not filed and/or the required fee was not paid.
15. Construction and infrastructure examples
Government construction contract
A contractor files an AAR application on whether a particular notification applies. Before filing, it should verify that the question is not already pending in an assessment/audit/proceeding involving the same applicant.
HAM project valuation
An infrastructure company wants a ruling on value of supply. It should provide the concession agreement, payment mechanism, milestones, consideration structure and relevant contractual documents.
RA bill dispute
If the same tax question is already being examined in a departmental proceeding for the applicant, Section 98 admission issues must be considered before filing an AAR application.
Project ITC
A construction company seeks an ITC ruling. The application should clearly identify each input/service, its use and the exact Section 97(2)(d) question.
16. Detailed practical cases
Case 1 — Proper application
Applicant files ARA-01, pays prescribed fee, gives a precise Section 97(2) question and provides complete facts. AAR proceeds to statutory examination.
Case 2 — Same question already under scrutiny
Department is already examining the same question for the applicant. The admission restriction under Section 98(2)/(3) must be examined.
Case 3 — Wrong filing procedure
Applicant pays only one required component or fails to follow prescribed filing requirements. Recent AAR records show such procedural failures can result in rejection.
Case 4 — Classification
Manufacturer files a classification question and supplies complete product specifications and samples/documentation.
Case 5 — Notification
Contractor identifies the exact notification and conditions and asks whether its transaction satisfies them.
Case 6 — ITC
Company identifies a specific inward service and explains business use rather than asking a broad “all ITC” question.
Case 7 — Value of supply
Applicant provides agreements and pricing calculations to support a valuation question.
Case 8 — Registration
Applicant provides turnover and supply details for a registration question.
Case 9 — Supply question
Applicant explains the actual activity and asks whether it constitutes a supply.
Case 10 — Hearing preparation
Applicant's representative prepares a clause-by-clause written submission matching the question in ARA-01.
Case 11 — AAR ruling received
Finance team compares the ruling with the exact facts and updates GST controls accordingly.
Case 12 — Appeal
If the applicant disagrees with the ruling, the Section 100 appeal route should be evaluated within the statutory period.
17. Documents checklist
18. Professional workflow
Map to Section 97(2).
Confirm registration/status.
Search for pending/decided proceedings.
Form, fee, signatures and filing method.
Contracts, invoices and technical documents.
Complete prescribed AAR process.
Respond to procedural queries.
Written and oral submissions.
Compare answer with exact facts.
Decide next step within time.
19. Common mistakes
- Assuming filing ARA-01 guarantees admission.
- Ignoring Section 98 admission restrictions.
- Failing to check whether the same question is already pending or decided.
- Not paying the prescribed fee correctly.
- Ignoring manual filing requirements where applicable.
- Submitting incomplete contracts or factual information.
- Asking a question outside Section 97(2).
- Not preparing for the concerned officer's objections.
- Assuming the six-month period means an immediate ruling after filing.
- Failing to preserve the complete application and annexures after the ruling.
- Ignoring the appeal time limit after an adverse ruling.
20. What happens after AAR ruling?
Section 98 deals with the original AAR ruling. If the applicant or jurisdictional officer is aggrieved, the appeal framework under Section 100 becomes relevant.
| Stage | Provision | Practical action |
|---|---|---|
| Application | 97 | File ARA-01. |
| AAR procedure | 98 | Admission, hearing and ruling. |
| Appeal | 100 | Evaluate ARA-02/ARA-03 within statutory period. |
| AAAR order | 101 | Review appellate ruling. |
21. Binding effect
Section 103 provides that an advance ruling is binding only on the applicant who sought it and on the concerned or jurisdictional officer in respect of that applicant, subject to the statutory conditions.
This is why the complete factual record matters. A ruling should not be detached from the applicant, transaction and facts on which it was issued.
22. Legislative development
23. Section 98 GST FAQs
What is Section 98 of the CGST Act?
Section 98 lays down the procedure followed by the Authority for Advance Ruling after receiving an application.
Can AAR reject an advance-ruling application?
Yes. Section 98(2) permits the Authority to admit or reject an application after the statutory examination and hearing.
Why can an AAR application be rejected?
Possible reasons include statutory admission restrictions, questions outside the permitted framework and procedural deficiencies such as prescribed filing or fee requirements.
What happens if the same GST question is already pending?
The advance-ruling application may face the statutory admission bar where the question is already pending or decided in proceedings in the applicant's case.
Does AAR call for records?
Yes. Section 98(1) allows the Authority to call for relevant records from the concerned officer.
Is there a hearing before AAR?
Yes. Section 98 provides for hearing of the applicant/authorised representative and the concerned or jurisdictional officer/representative.
How long does AAR have to issue a ruling?
Section 98(6) provides six months from the date of receipt of the application.
What is Section 98(4)?
It deals with the AAR's ruling after admission, examination and hearing.
What is Section 98(6)?
It provides the six-month period for pronouncing the advance ruling.
Can a procedural defect cause rejection?
Yes. Current AAR records include Section 98(2) rejection orders involving failure to comply with prescribed filing requirements and fee requirements.
What is ARA-03?
Rule 106 provides Form GST ARA-03 for an appeal by the concerned or jurisdictional officer; no appeal fee is payable by that officer.
Does AAR ruling bind everyone?
No. Section 103 generally limits binding effect to the applicant and the concerned/jurisdictional officer for that applicant.
25. Key takeaways
- Section 98 governs the original AAR procedure after an application is filed.
- AAR forwards the application to the concerned officer and may call for records.
- The Authority can admit or reject the application.
- Pending or already decided proceedings involving the same question can prevent admission.
- After admission, the applicant and concerned/jurisdictional officer get an opportunity to be heard.
- AAR pronounces the ruling in writing.
- Section 98(6) provides six months from receipt of the application for pronouncing the ruling.
- Procedural compliance matters: current 2026 AAR records show rejection for filing and fee deficiencies.
- After the AAR ruling, Section 100 should be considered if an appeal is required.
- Section 103 limits the binding effect of the ruling to the applicant and relevant officer, subject to the law.
Disclaimer: This guide is for practical educational use. AAR procedure can depend on the facts, filing method, applicable State/UT framework and current Rules. Verify the operative procedure before filing.