Assessments under GST
In
terms of Section 2(11) of the Act, “assessment”
means determination of tax liability under this Act and includes
self-assessment, re-assessment, provisional assessment, summary assessment and
best judgment assessment.
Various types of assessment under GST
- Self Assessment (section 59)
- Provisional Assessment (section 60)
- Scrutiny of returns (section 61)
- Assessment of non-filler of returns (section 62)
- Assessment of unregistered persons (section63)
- Summary assessment in special cases (section 64)
Self-Assessment
Every registered person shall self assess taxes payable
under this act and furnish returns for each tax period. It means assessment by
registered person himself.
Principles of self-assessment were contained in Central Excise
Laws, Service Tax Laws as well as VAT Laws. GST regime continuous to promote scheme of self-assessment.
Although
the definition includes ‘reassessment’ there is no provision permitting ‘re-
examination’ of an assessment (of any kind) conducted earlier by the same or
any other officer. This drafting anomaly is yet to be corrected. Power to
reassess cannot be inherent in the power to assess (of any kind) permitted in
the Act.
Remedy
Provisional Assessment
Applicability: -
When taxable person cannot determine either
·
Value of supply
I.e.
taxable person faces difficulty in ascertaining transaction value or inclusion
or exclusion of any amount in value of supply.
·
Rate of tax applicable on the supply.
I.e. taxable person faces difficulty in ascertaining
classification of supply or applicability of any exemption notification or
compliance with any associated condition.
Procedure to be followed: -
Ø
Registered person shall furnish an application in
FORM GST ASMT-01, along with supporting
documents, on common portal requesting proper officer to allow payment of tax
on provisional basis.
Ø
Proper officer on receipt of FORM GST ASMT-01 may issue notice in FORM GST ASMT-02 requiring registered
person to furnish additional information or documents and registered person
shall file reply in FORM GST ASMT-03 and may appear in person
before proper officer, if required.
Ø
After considering the reply, Proper officer
shall pass order in FORM GST ASMT-04,
within 90 days from receipt of request of provisional assessment either
allowing the payment of tax on provisional basis or rejecting the application
after stating the reasons for same. Order shall indicate value or rate or both
on basis of which provisional assessment is to be made.
Ø
Payment of tax on provisional basis may be
allowed, if taxable person executes a bond with security or surety not
exceeding 25% of bond amount. Registered person shall furnish bond in FORM GST ASMT-05 along with bank
guarantee as security. Purpose of bond is to bind the taxable person for
payment of difference between tax finally assessed and tax provisionally
assessed.
Ø
Proper officer shall within 6 months from date
of provisional assessment order pass final assessment order in FORM GST ASMT-07. For this purpose
proper officer shall issue notice in FORM
GST ASMT-06 to call for information and records for finalization of
assessment.
Ø
However, if for sufficient reasons order cannot
be passed within 6 months, this period can be extended by joint/additional
commissioner or by the commissioner for further period as mentioned below: -
Additional/joint
commissioner
|
Maximum
of 6 months
|
Commissioner
|
Maximum
of 4 years.
|
1. When
final assessment order is passed. There can be 2 possible scenarios:
o
Scenario 1
Tax payable consequent to final assessment order. In
such case registered person shall be liable to pay interest on the shortfall
@18% under section 50(1) from 1st
day after due date of payment of tax in respect of such supply till actual date
of payment.
o
Scenario 2
Registered person entitled to refund consequent to
final assessment order. Interest on such refund shall be paid @6% under section
56 for aforesaid period. Claim of refund must be made in accordance with
section 54 as this section only authorizes refund but does not permit grant of
refund.
2. After
final assessment order in FORM GST
ASMT-07. Registered person may file an application in FORM GST ASMT-08 for release of security.
3. Proper
officer shall release security in FORM
GST ASMT-09 within 7 working days from receipt of FORM GST ASMT-08 after ensuring payment of amount specified in
order.
Scrutiny of returns.
Section
61 deals with a discretionary power of a proper officer to scrutinize returns
filed by registered persons to verify the correctness of the return. It is a
pre-adjudication process. The process of adjudication is provided in Sections
73 to 75 of the Act.
Proper officer shall scrutinize the returns
furnished by registered persons to verify its correctness and in case of discrepancies
issue FORM GST ASMT-10 informing him
of such discrepancies and seeking explanations within 30 days from date of
service of notice. Such period may be extended. Notice should contain the
detail of the amount of tax, interest and any other amount payable in relation
to such discrepancy.
Case
I
Registered person accepts discrepancy and
pays tax, interest and any other sum arising thereon and furnishes explanations
in FORM GST ASMT-11 to proper
officer. If explanations are found acceptable, proper officer shall inform
registered person in FORM GST ASMT-12
and no further action shall be taken in this regard.
Case
II
·
No
satisfactory explanations furnished within 30 days or such further period, or
·
Registered
person after accepting discrepancies fails to take corrective measures in
return for the month in which discrepancy is accepted. Proper officer may take
appropriate action including: -
I.
Conduct
audit at place of business of registered person under section 65 of the act, or
II.
Direct
registered person by notice in writing to get his records audited by a
chartered Accountant or a cost Accountant under section 66 of the act, or
III.
Undertake
inspection, search and seizure under section 67, and
IV.
Proceed
to determine dues under section 73 & 74 of Central goods and service Act,
2017.
From the
language employed in section 67, it appears that, these powers are required to
be exercised not in routine manner but only under circumstances when there is
reasonable belief regarding probable suppression or intention to evade tax.
Assessment of non-filler of returns
Applicability
When a registered person fails to furnish return under
section 39(monthly return) or 45(Final return), even after service of notice
under 46(notice for non furnishing of returns).
Procedure
Proper officer may proceed to assess tax to the best of his
judgment taking into account all the relevant material available with him or
gathered by him. And issue assessment order in FORM GST ASMT-13.
Period
Assessment order shall be passed within 5 years from due date
of furnishing annual return (on or before 31st December) under
section 44 for financial year to which tax not paid related to.
Where registered
person furnishes “valid return” within 30 days of service of order, said
assessment order should be withdrawn. But liability to pay interest @18% under
section 50(1) or late fee (100 per day max. 5000) under section 47 shall
continue.
As per section 2(117) valid return means
return filled under section 39(1) of the act along with self assessed tax.
Assessment of unregistered persons
Applicability
It is applicable in 2 situations: -
1.
Taxable person fails to obtain registration even
when required to do so i.e. a registered person.
2.
Taxable person whose registration has been
cancelled under section 29(2) but who was liable to pay tax.
Registration can be cancelled if: -
i.
A
person contravenes provisions of this act or rules.
ii.
A
composition person fails to furnish return for 3 consecutive tax periods.
iii.
A
person other than composition dealer fails to furnish return for 6 consecutive
tax periods.
iv. A
person who has sought voluntary registration but has failed to commence
business in 6 months
v.
Registration
has been obtained by way of fraud, willful misstatement or suppression of
facts.
Procedure
Proper
officer may proceed to assess tax liability of such person to the best of his
judgment for relevant tax period by issuing notice in FORM GST ASMT-14 containing grounds on which assessment is proposed
to be made. Taxable person shall furnish his/her reply within 15 days. After
considering the reply, proper officer may pass order in FORM GST ASMT-15.
Period
Order has to
be passed within 5 years from due date of furnishing Annual Return under section
44 (on or before 31st December) for financial year to which tax not
paid relates to.
Summary assessment in special cases
The word “Summary Assessment” is generally used to denote
“fast track assessment” based on return filed by the assesse. In GST Act, it
denotes assessments, which are, completed ex-parte and on priority basis when
there is reason to believe that there will be loss of tax revenue, if such
assessment is delayed.
The summary assessment can be undertaken in case all the
following conditions are satisfied: -
·
Proper officer must have evidence that there may
a tax liability.
·
Proper officer has obtained prior permission of
additional/joint commissioner to assess the tax liability.
·
Proper officer must have sufficient grounds to
believe that delay in passing assessment order would result in loss of revenue.
If all
conditions are satisfied, proper officer shall issue summary assessment order
in FORM GST ASMT-16.
Can summary assessment order be
withdrawn: - YES
If Additional/Joint commissioner
·
On receipt of application from such person in FORM GST ASMT-17 challenging the
facts or reasons for belief about risk of revenue loss. Application shall be
made within 30 days of receipt of order, or
·
On his own motion
Considers that order is erroneous.
Proper
officer shall withdraw Summary Assessment order in FORM GST ASMT-18. It appears from the language of the section that
a notice under section 73 or 74 shall follow such a withdrawal.
Where taxable person is not ascertainable
Summary Assessment is undertaken in such cases. In such cases, if the liability pertains to supply of goods,
then person in charge of such goods shall be deemed to be the taxable person
liable to be assessed and pay tax and amount due on completion of summary
assessment.
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