The finance ministry has notified the ‘e-advance rulings Scheme’, enabling taxpayers to file their application for advance ruling through e-mail, a move that will majorly benefit non-resident assesses in such proceedings. The ‘e-advance rulings Scheme, 2022’, notified by the Central Board of Direct Taxes (CBDT), further provides that hearing before the Board for Advance Rulings will be conducted through video conferencing/ video telephony, where taxpayers would be granted an appropriate opportunity of being heard.

The advance ruling mechanism is provided in the Income Tax Act to provide upfront clarity to non-residents and certain other specified taxpayers, regarding the taxability of their transactions in India under Indian I-T laws.

The scheme also provides that all communications between the taxpayer/ income tax authorities and the Board for Advance Rulings will take place in electronic mode.

Every notice or order or any other electronic communication under this scheme from the Board for Advance Rulings will be delivered to the applicant by sending an e-mail to the registered email address of the applicant or his authorised representative.

It also states that the applicant or the authorised representative would file his response to any notice or order or any other electronic communication, under this scheme, to the Board for Advance Rulings through his registered email address.

Nangia Andersen India Chairman Rakesh Nangia said such an e-advance ruling scheme for making applications, all correspondences through e-mail/ electronic mode and also conducting hearings through videoconferencing will help non-resident applicants participate in these proceedings through electronic mode without the need to travel physically.

It is helpful considering that the majority of applicants for an advance ruling are non-residents situated outside India, he added.

“However, implementation will be key to the success of the scheme and the authorities would need to ensure that adequate opportunity of hearing, albeit through video conferencing, is provided to the applicants,” Nangia said.