The procedure of advance ruling has been introduced by the Finance Act 1993 w.e.f. 1st June 1993. The salient features of the scheme are as under -

1. It applied only to non-residents

2. Any non-residents desirous of obtaining advance ruling may make an application alongwith a payment of fee of Rs.2, 500/-

3. Such an application can be withdrawn within 30 days

4. The advance ruling shall be binding on the applicant as well as on the tax authority.

The authority staff on advance ruling consists of -

1. A Chairman, who is a retired judge of Supreme Court;

2. An officer of Indian Revenue Service, qualified to be a member of Central Board of Direct Taxes;

3. An officer of the Indian Legal Service qualified to be an Additional Secretary to the Government of India.

The office of the authority is located in Delhi. The authority shall give its advance ruling within six months of the receipt of application.