Budget 2017: Single AAR to deal with all taxes

NEW DELHI: The government proposed an all-encompassing Authority for Advance Ruling ( AAR) to deal with both direct and indirect taxes, a move that will bring about some synergy in tax infrastructure ahead of the roll out of goods and services tax.

Finance minister said the customs law would be amended to merge the current AAR for income tax with those of customs, central excise and services tax.

The government has created a provision for transferring the applications pending before the AAR of customs, central excise and service tax to the one dealing with income tax. Going forward, the latest step may help bring greater convergence between both direct and indirect tax administration and infrastructure.

In order to improve the efficiency and efficacy of the AAR, and to increase the available pool for appointment as Chairman, AAR, the government has also proposed to amend the eligibility criterion. A former chief Justice of a High Court, or a person who has been a High Court Judge for at least seven years shall also be eligible to be Chairman of the AAR.

The government has also raised the fees for availing the AAR facility to Rs 10000 from Rs 2500 now. AAR is a quasi-judicial body that allows companies to get a guidance on their potential tax liabilities relating to any transaction beforehand.