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The Union Budget 2014-15 was announced by The Hon’ble Finance Minister ‘Arun Jeithly’ on 10.07.2014. In this budget, some amendments have been made in the regime of Indirect Taxation i.e. Central Excise, Service tax, Customs etc. One of the amendments is about eligibility of availing Advance Ruling in Central Excise, Customs and Service tax matters. This is a very beneficial step taken in order to reduce litigations.

Glance at the Earlier Provision:-

As per provisions relating to Advance Rulings contained in section 23C of the chapter III A of central Excise Act, 1944, and similar provisions contained in Section 96A of the Finance Act, an applicant desirous of obtaining an advance ruling may make an application in such form and in such manner as may be prescribed, stating the question on which the advance ruling is sought. For this purpose, followings are allowed to make application to advance ruling authority-

· a non-resident setting up a joint venture in India in collaboration with a non-resident or  a resident; or

· a resident setting up a joint venture in India in collaboration with a non-resident; or

· a wholly owned subsidiary Indian company, of which the holding company is a foreign company, or which, as the case may be, proposes to undertake any business activity in India;

· a joint venture in India; or

· a resident Public limited companies

· a resident falling within any such class or category of persons, as the Central Government may, by notification in the Official Gazette, specify in this behalf, and which or who, as the case may be, makes application for advance ruling under sub-section (1) of section 23C;

Amended Provision:-

The amendment seeks to extend the benefit of Advance Ruling to Resident Private Limited Companies. In pursuant to section 23A (c)(iii) of the Central Excise Act, 1944 and similar section 96A (b)(iii) of the Finance Act, 1994, the government has exercised its power to specify “Resident Private Limited Companies” as the category of persons who may obtain advance ruling. This amendment is made vide Notification no. 18/2014 CE (NT) DT. 11.07.2014 in Central Excise, vide Notification no. 51/2014 CUS (NT) DT. 11.07.2014 in Custom and vide Notification no. 15/2014- ST DT. 11.07.2014 in Service Tax.

Thus, through above mentioned notifications, Central Government has exercised the power and specified the Resident Private limited Companies as class of person eligible to make application for Advance Ruling.

For the purposes of this notification,-

(a) “private limited company” shall have the same meaning as is assigned to “private company” in clause (68) of section 2 of the Companies Act, 2013 (18 of 2013);

(b) “resident” shall have the same meaning as is assigned to it in clause (42) of section 2 read with sub-section (3) of section 6 of the Income-tax Act, 1961 (43 of 1961).


Presently, only a selected category of persons are eligible for Advance Ruling. The definition of applicant as given consists of mainly Joint venture having non-residents also and Resident Public Limited Companies. Now, the Central Government has made efforts to include ‘Resident Private Limited Companies’ under the meaning of the Applicant eligible for filing application of Advance Ruling in Central Excise, Customs and Service Tax matters.

Thus, this is a welcome step by the Government. This facility of Advance Ruling is primarily available only to non-residents who want to carry on business in India with residents and wants to be very clear about tax implications so as to be free from any litigation or dispute. This step of Government will enable the ‘Resident Private Limited Companies’ to obtain Advance Ruling in cases of Central Excise, Customs and Service tax matters. By this step, more exact, consensus or uniform ruling may be obtained by the Resident Private Limited Companies and harmony may be achieved in the tax compliance. Thus, the Government is gradually increasing the scope of Advance Ruling which is a good indication for error- free and litigation free working. In the near future, the same would provide conducive tax environment to work in. 

An Article by:-

CA Pradeep Jain

CA Neetu Sukhwani &

Ankit Palgauta


Published by

Pradeep Jain
Category Others   Report

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