Sections 8, 9, 12, 13 & 95 to 106 of Central Goods & Services Tax (CGST) Act, 2017 read with Customs Tariff Act, 1975 and Rate Notifications

HSN Classification, Rate Determination & Advance Rulings

Indirect tax advisory covering HSN/SAC code determination, composite versus mixed supply evaluations under Section 8, taxability legal opinions, and formal representation before the Authority for Advance Ruling (AAR) and AAAR under the CGST Act, 2017.

CA Due Diligence

Official Portal Filing

State Stamp Advisory

HSN Classification, Rate Determination & Advance Rulings Statutory Advisory

Statutory Filing

MCA & Tax Practice

Relevant RegulatorCBIC & AAR, Ministry of Finance, Govt of India

Goods and Services Tax Official Common Portal & CBIC Tariff

The official Government of India portal for filing Advance Ruling applications in Form GST ARA-01, checking official HSN/SAC tariff classifications, reviewing binding AAR/AAAR rulings, and tracking advisory clarifications.

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STATUTORY OVERVIEW

Technical Classification, Rate Analysis & Legal Opinions

Accurate classification of outward deliverables and correct tax rate determination represent the cornerstone of indirect tax compliance. Ambiguities in tariff headings, evolving product formulations, bundled commercial offerings, and frequent notification amendments create substantial exposure to differential tax demands and interest liabilities. Our consultancy practice provides rigorous technical analysis rooted in the General Rules of Interpretation, judicial precedents, and statutory Advance Ruling mechanisms.

Statutory & Practice Summary • At-A-Glance

ICAI UDIN Authentication Mandate

Governing Framework

Sections 8, 9, 12, 13 & 95 to 106 of Central Goods & Services Tax (CGST) Act, 2017 read with Customs Tariff Act, 1975 and Rate Notifications

Regulatory Authority

Central Board of Indirect Taxes and Customs (CBIC) & Authority for Advance Ruling (AAR), Ministry of Finance, Govt of India

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required

1. Promoters / Partners / Directors KYC

✓Authorized Signatory PAN Card, Aadhaar Card, and active portal credentials
✓Digital Signature Certificate (Class 3 DSC) for signing electronic petitions
✓Board Resolution or Letter of Authority appointing Chartered Accountant legal counsel

2. Registered Office & Premises Proof

✓Active GSTIN registration certificate reflecting current Principal Place of Business
✓Operational facility address proof where manufacturing or service provisioning occurs

3. Specific Statutory Declarations & Enclosures

•Detailed technical brochure, chemical composition, lab test certificates, and manufacturing process flowcharts
•Commercial agreements, master service agreements, and bundled offering transaction terms
•Sample invoices, packaging artwork, and product labeling for retail and institutional trade
•Customs Tariff Headings (8-digit HSN) comparison and corresponding world customs precedents (WCO rulings)
•Proof of payment of statutory advance ruling fees (₹5,000 CGST + ₹5,000 SGST) through Form GST PMT-06 challan

PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Week 1

Technical Product & Contractual Profiling

Analyzing functional attributes, end-use, trade parlance, chemical composition, and dismantling contract deliverables into individual supply components.

02Week 2

Tariff Analysis & General Rules of Interpretation

Applying the 6 General Rules for the Interpretation (GRI) of Customs Tariff, Section Notes, Chapter Notes, and relevant CBIC rate notifications.

03Week 3

Form GST ARA-01 Drafting & Legal Grounds

Formulating questions on which advance ruling is sought, drafting comprehensive statements of facts, legal submissions, and filing Form GST ARA-01.

04Within 90 Days

Bench Hearing & Binding Ruling Order

Representing the applicant before the two-member bench of the Authority for Advance Ruling (AAR) and securing the statutory binding order under Section 98.

HSN & SAC Classification under Customs Tariff Schedules

Practice Scope & Statutory Guidance

GST classification for goods adopts the 8-digit Harmonized System of Nomenclature (HSN) under the First Schedule to the Customs Tariff Act, 1975, while services follow the 6-digit Services Accounting Code (SAC). We analyze chemical compositions, product functions, essential character tests, and trade parlance using the General Rules for the Interpretation (GRI) of the Harmonized System, Section Notes, and Chapter Notes to establish legally defensible tariff classifications and determine the exact applicable tax rates.

Composite vs Mixed Supply Determinations (Section 8)

Practice Scope & Statutory Guidance

Commercial packages frequently bundle multiple goods or services. Under Section 8 of the CGST Act, bundled transactions must be classified either as a 'Composite Supply' (naturally bundled and supplied together in the ordinary course of business with a Principal Supply) or as a 'Mixed Supply' (supplied together for a single price, taxed at the highest individual rate). We conduct technical contract evaluations to structure billing schedules, ensuring transparent tax treatment and eliminating inadvertent exposure to peak GST rates.

Applications for Advance Ruling (AAR & AAAR)

Practice Scope & Statutory Guidance

Where statutory ambiguity exists regarding classification, applicable rate, exemption applicability, or taxability of a proposed or ongoing business transaction, taxpayers can seek statutory certainty. Under Section 97, we prepare and file formal applications in Form GST ARA-01 before the State Authority for Advance Ruling (AAR). Furthermore, we formulate appeals before the Appellate Authority for Advance Ruling (AAAR) under Section 100 in Form GST ARA-02 where orders require appellate reconsideration.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Classification & Advisory Area	Governing Statutory Section & Rule	Statutory Rule & Essential Legal Test
Composite Supply (Naturally Bundled Deliverables)	Section 2(30) read with Section 8(a) of CGST Act	Two or more supplies naturally bundled in ordinary course of business; treated as a supply of the 'Principal Supply' and taxed at principal rate.
Mixed Supply (Artificially Bundled Deliverables)	Section 2(74) read with Section 8(b) of CGST Act	Two or more independent supplies bundled for a single price; entire package is taxed at the highest individual tax rate among the bundle.
Application for Advance Ruling (AAR)	Section 97 read with Rule 104 (Form GST ARA-01)	Filed before AAR on questions of classification, taxability, time/value of supply, ITC admissibility, or registration liability.
Appeal before Appellate Authority (AAAR)	Section 100 read with Rule 106 (Form GST ARA-02)	Filed within 30 days (extendable by 30 days) against an adverse AAR order upon payment of ₹10,000 statutory appeal fee.
8-Digit HSN Mandate on B2B Invoices	Notification No. 78/2020-CT read with Rule 46	Mandatory 4-digit HSN for turnover up to ₹5 Cr; 6-digit HSN for turnover > ₹5 Cr; 8-digit HSN for chemicals, metals, and exports/imports.

ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

Binding Law on Applicant & OfficerFrom Date of Order Issuance

Binding Nature of Advance Ruling (Section 103)

The advance ruling pronounced by AAR or AAAR is legally binding on the applicant and the jurisdictional tax officers unless law or facts change.

Form GST ARA-02 AppealWithin 30 days of receipt of AAR order

Appeal before Appellate Authority (AAAR)

If the AAR ruling is unfavorable, an appeal lies before the Appellate Authority for Advance Ruling (AAAR) under Section 100.

ERP Master File UpdateImmediate upon Ruling Finalization

Invoice HSN/SAC Code Updating

Updating tax invoice formats, ERP billing masters, and E-Way bill configurations with the authenticated 8-digit HSN or 6-digit SAC code.

Form GST DRC-03 RegularizationProactive Ledger Adjustment

Differential Tax Assessment (if applicable)

Discharging any historical differential liability if a higher tax rate is confirmed by the ruling, minimizing potential penal additions.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding HSN Classification, Rate Determination & Advance Rulings.

What questions can be legally raised before the Authority for Advance Ruling (AAR)?

Under Section 97(2) of the CGST Act, an applicant can seek an advance ruling on: (a) classification of goods or services, (b) applicability of an exemption notification, (c) determination of time and value of supply, (d) admissibility of input tax credit, (e) determination of liability to pay tax, (f) whether applicant is required to be registered, and (g) whether a particular activity amounts to or results in a supply of goods or services.

What is the key legal distinction between a Composite Supply and a Mixed Supply?

A Composite Supply consists of two or more taxable supplies of goods or services which are naturally bundled and supplied together in the ordinary course of business, where one is the principal supply (e.g., flight ticket with meal). It is taxed at the rate of the principal supply. A Mixed Supply consists of two or more individual supplies bundled together for a single price that could be supplied separately (e.g., Diwali gift hamper with sweets and dry fruits). It is taxed at the highest tax rate applicable to any item in the bundle.

Is an Advance Ruling binding across the entire country?

No. Under Section 103 of the CGST Act, an advance ruling pronounced by an AAR or AAAR is binding only on the applicant who sought it and on the jurisdictional tax officer in respect of that specific applicant. It does not operate as a binding precedent for other taxpayers, though it carries persuasive value.

Can an Advance Ruling be sought for an issue that is already under scrutiny or audit?

No. Under the first proviso to Section 98(2), the Authority for Advance Ruling will reject the application if the question raised is already pending or has been decided in any proceedings in the case of the applicant under any of the provisions of the CGST Act.

STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

Information on HSN Classification, Rate Determination & Advance Rulings is provided for general reference. Office addresses and contact details are listed on the Contact page.

Contact Practice Office +91 99140-14949