Section 97(2): The Seven Questions You Can Actually Ask

Section 97 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

An advance ruling is not a general opinion service. The Act lists seven subjects, and a question outside them is not admitted no matter how commercially important it is.

Section 97(2): the question shall be in respect of — (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether the applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services amounts to or results in a supply.

The seven clauses, and what each really covers

(a) Classification. The HSN or SAC under which goods or services fall. The largest single category of rulings, and the one for which the mechanism is best suited — a factual description of the product, tested against tariff headings and chapter notes.

(b) Applicability of a notification. Whether a specific exemption, concessional rate, reverse charge or procedural notification applies to the applicant's supply. Note the phrasing: applicability of a notification, not the correctness or validity of one. The AAR applies notifications; it does not review them.

(c) Time and value of supply. Both are covered. Value questions include the valuation rules — Rule 28 for related persons, Rule 29 for agents, Rule 30 and 31 — and questions on inclusions and exclusions under s.15.

(d) Admissibility of input tax credit. Including s.17(5) blocked-credit questions, apportionment under s.17(1)–(2), and the Rule 42/43 position. "Tax paid or deemed to have been paid" brings in reverse-charge and deemed-payment situations.

(e) Liability to pay tax on any goods or services. The broadest clause, and the one under which questions that do not neatly fit elsewhere are usually framed — including reverse charge liability and whether a transaction attracts tax at all.

(f) Whether the applicant is required to be registered. A question that matters most to persons outside India or outside the State, and to entities uncertain whether a threshold or a compulsory-registration entry under s.24 applies.

(g) Whether a particular thing done amounts to or results in a supply. The scope of supply question — Schedule I deemed supplies, Schedule III exclusions, recoveries from employees, cross charge, liquidated damages, transactions in securities.

Two limits built into the definition

Section 95(a) defines "advance ruling" as a decision on the s.97(2) matters "in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant."

Limit one — it must be the applicant's own supply. Not a supplier's, not a customer's, not a group company's. A recipient cannot obtain a ruling on the classification of what its vendor supplies, though it can ask about the admissibility of credit on it under clause (d), which is its own question.

Limit two — undertaken or proposed to be undertaken. Both are permitted, so a prospective transaction is a proper subject — indeed the classic one. But there must be a real transaction or a genuinely proposed one. A hypothetical framed to obtain a general proposition is not within the definition.

Section 95(c) defines "applicant" as any person registered or desirous of obtaining registration. So an unregistered person genuinely proposing to enter the Indian market may apply — which is what makes clause (f) usable.

Framing the question so it fits

The single most common reason an application fails is not the merits. It is the framing.

Anchor it to a clause. State in the application which clause of s.97(2) the question falls under, and frame the question in the clause's own language. "Whether the supply of X is classifiable under HSN ... " sits squarely in clause (a); "what is the correct GST treatment of our arrangement with Y" sits nowhere.

Split compound questions. A question that mixes classification, valuation and credit should be three questions, each anchored to its clause. A compound question invites a partial answer or a rejection.

State the facts fully and accurately. The ruling binds only on the facts stated, and s.104 makes a ruling void ab initio where it was obtained by fraud, suppression of material facts or misrepresentation. A fact omitted because it was inconvenient is the fastest route to losing the ruling later. Section 104 →

Attach the documents. The contract, the product specification, the technical literature, the pricing schedule. The AAR decides on what is before it.

Ask about your own supply. Where the concern is really about a vendor's treatment, reframe it as an input tax credit question under clause (d).

The application itself

Rule 104(1): an application under s.97(1) shall be made on the common portal in FORM GST ARA-01, accompanied by a fee of five thousand rupees, deposited in the manner specified in s.49.

Note that the CGST fee of ₹5,000 is matched by an equivalent fee under the State Act, so the practical outlay is ₹10,000.

Rule 104(2): the application, the verification and all relevant documents shall be signed in the manner specified in Rule 26 — that is, with a digital signature certificate or e-signature as applicable to the class of person. ARA-01 draft and guide →

Key takeaways

• Section 97(2) lists seven subjects, and the list is exhaustive.
• The question must concern the applicant's own supply, undertaken or proposed to be undertaken.
• An unregistered person desirous of registration may apply — which makes clause (f) usable.
• Frame the question in the clause's own words, and split compound questions.
• State all material facts; s.104 voids a ruling obtained by suppression or misrepresentation.
• ARA-01 on the portal, ₹5,000 under the CGST Act, signed as Rule 26 requires.

Read next

• What an Advance Ruling Cannot Decide
• Section 98(2): "Already Pending or Decided" — the Admission Bar
• Section 103: Binding Only on the Applicant
• Advance Ruling Application (ARA-01) — Draft and Guide

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).