Authority for Advance Rulings on direct, indirect tax merged

New Delhi, July 7 (PTI) The government has merged the
Authority for Advance Rulings (AAR) for direct and indirect
taxes, the two arms of Finance Ministry of India, where
overseas firms and Non-Resident Indians can know their tax
liabilities.

"To further enhance efficiency in tax administration , I
intend to merge the two Authorities for Advance Rulings on
Direct and Indirect Taxes by amending the relevant Acts,"
Finance Minister Pranab Mukherjee said unveiling the budget
for 2008-09.

The move, he said, would enable the Authority for Advance
Rulings set up under the Income Tax Act 1961 to also function
as the Authority for Advance Rulings for Indirect Taxes.

The AAR was established to address the taxability issues
of NRI assessees. The assessees can put in an application to
the authority and seek judgement on their tax issues.

The rulings given by the tax authority is binding on the
two parties -- the revenue department and the individual
assessee, or the company.

However, a ruling sets a precedence for other companies
involved in similar activities.

There were talks for a long time to merge the two for
functional efficiency as the direct taxes AAR had more cases
to handle but the indirect taxes AAR did not have enough. PTI
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