Bhupesh Moriya
Chapter XII of the CGST ACT covers all the provisions related to assessment
In term of Section 2 (11) of the CGST “Assessment” means determining the tax liability under GST Act.
Assessment simply means calculation of the tax liability. It is integrating part of the GST as without assessment it is very much difficult to determine tax liability of a taxable person.
According to CGST act, Types of Assessment are as under: –
1. Self-Assessment (Section 59)
2. Provisional Assessment (Section 60)
3. Summary Assessment in certain special cases (Section 64)
Tax liability can also be determined as under: –
- Scrutiny of tax return fixed by registered taxable person (Section 61)
- Assessment of registered person who have failed to file the tax return (Section 62)
- Assessment of unregistered person (Section 63)
1. Self-Assessment (section 59)
- What is Self-Assessment?
Self-Assessment means an assessment by assessee or taxable person himself. Proper Officer has no role to play in this type of assessment. The GST regime always continues to promote the scheme of self-assessment.
- How liability is calculated in Self-Assessment?
In this type of assessment, every register taxable person would require calculating his/her tax liability according to the provision of GST act.
A taxable person who is register under GST can calculate his own liability to the provisions of GST and it is always assumed that he acts in a good faith.
2. Provisional Assessment (Section 60)
Provisional Assessment is the assessment the proper officer calculates the tax liability of tax assesses.
- When
This type of assessment can be restored in following: –
When value of supply cannot be determined by the taxable person. It is difficult to in ascertaining: –
⇒ Transaction Value of supply for determination of tax
⇒ Inclusion or exclusion of any amount in the value of supply
⇒ Circumstance causing failure of transaction value declared
Rate of tax applicable on the supply cannot be determined.
For ex- an industry which provide Intra and Inter State supplies have uncertainty about the kind of taxes (CGST-IGST) application, time of supply etc in these cases, assess have to seek Provisional Assessment.
- Special Note
A Proper Officer have no right to give his judgement, unless and until the assess request officer in writing in FORM GST ASMT-01 electronically along with the supported documents giving reason to get permit to pay tax on provisional basis.
- Time limit
The Proper Officer have to pass order of assessment within 90 days from the receipt of the request by the assessee on the surety or security for any differential tax that may be eventually grossed.
For Example – ABC ltd. Is a manufacturer, who supplies its material from Jaipur to Karnataka. Then, in this case he is not able to find out the rate and the type of taxes which is to be levied on him. So, this case is Provisional assessment.
Form to be filled by Assessee
| GST ASMT-01 | For Provisional Assessment |
| GST ASMT-03 | Reply to The Officer as He Pass the Order of Assessment |
| GST ASMT-05 | Bond with Bank Security |
| GST ASMT-08 | Application for release of security |
Form to be filled by Proper officer
| GST ASMT-02 | For Giving Permission |
| GST ASMT-04 | For Rejection or Following Payment of Tax |
| GST ASMT-06 | Officer Finalise The Assessment and Pass Final Assessment Order |
| GST ASMT-07 | Officer Specify the Amount of Tax Payable or Refunds |
| GST ASMT-09 | Release of Security furnished order |
3. Scrutiny of Tax (Section 61)
What is Scrutiny of tax?
It means scrutinize return filled by register person by Proper Officer to verify the corrective ness of the return. The Proper Officer has power to notice a registered person in any discrepancies. Any shortfall will be notified by the Proper Officer in FORM GST ASMT-10 and Assessee must give reply in FORM GST ASMT-11 within 15 days from the date of scrutiny. The notice contains amount of tax, interest and any other amount of discrepancy.
Further actions after scrutiny assessment
Where the explanations offered are satisfactory, this fact shall be informed to the assessee and no further action is taken against him. And if the explanation is not satisfactory within 30 days of being informed or the time period permitted by officer or after accepting discrepancies, registered person fails to take corrective measures, in return for the month, the officer take recourse after issuance of notice to any of the following provisions: –
⇒ Conduct audit at the place of business of registered person in a manner Provided in Section 65 of the Act; or
⇒ Direct such registered person by notice in writing to get his records including books of accounts examined and audited by a Chartered Accountant or Cost Accountant under Section 66 of the Act; or
⇒ Undertake procedures of inspection, search and seizure under Section 67 of the Act
⇒ And proceed to determine dues under sections 73 & 74 of the CGST Act.
The first stage scrutiny donates prime facie scrutiny. It is just checking the information given by assessee to check the validity of information. In second stage, the Proper Officer, calling for records and determination of tax liability under Section 73 to 75, detailed assessment.
Section 61(3) provides that, in case the explanation given by the tax payer in response to discrepancies informed by the Proper Officer is found acceptable the registered person shall be informed accordingly in FORM GST ASMT-12 and no action shall have taken.
- Section 65 – The Commissioner or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed.
- Section 66 – If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner.
- Section 67 – Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that–– (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act
- Section 73 – Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable.
- Section 74 – Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful- misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice.
- Section 75 – Where the service of notice or issuance of order is stayed by an order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74, as the case may be
4. Assessment of Non- filers of return (Section 62)
When registered taxable person failed to file returns as under section 39 or as the case may be or final return on cancellation of registration under Section 45 of this act, issuing notice under Section 46 appears to be a pre- condition for initiating proceedings under Section 62 of the act.
Non-compliance with the notice under Section 46 paves the way for intimating the proceedings under this section. If the assessee fails to furnish the return, the Proper Officer may after serving him notice under section 46 proceed to assess the tax liability to the best of his judgment, taking into account all the relevant material available on record, and issue an assessment order. This is also known as ‘best judgment assessment’. It can be completed without giving notice of hearing to the assessee. It may be noted that a return filed under Section 39 can be revised not later than the due date of furnishing of return for the month of September following the end of the financial year or actual date of filing annual return under Section 44, whichever is earlier. Therefore, issuance of notice under Section 46 is a necessity for commencing proceedings under Section 62. If, however, a registered person furnishes a ‘valid return’ within 30 days of the service of assessment order, the said assessment order shall be deemed to be withdrawn Time limit of 5 years is also applicable for issuing order under section 62. Consequence of late fee under Section 47 and interest under Section 50 will both be applicable in cases of conclusion of best judgement assessment made under this Section. An order passed under this section shall be communicated to the registered person in FORM GST ASMT 13.
- Section 39 – Every registered person, other than an Input Service Distributor or a non- resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed, on or before the twentieth day of the month succeeding such calendar month or part
- Section 44 – Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year.
- Section 45 – Every registered person who is required to furnish a return under sub-section (1) of section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as may be prescribed.
- Section 46 -Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.
- Section 47 – Any registered person who fails to furnish the details of outward or inward supplies required under section 37 or section 38 or returns required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of five thousand rupees.
- Section 50 – Any person fails to pay tax, he have to pay 18% interest on that amount.
5) Assessment of unregistered person (Section 63)
In this section, if an unregistered person i.e., persons who are liable to obtain registration under Section 22(Registration) and have failed to do so or case where registration was cancelled as per section 29(2) of the ACT.
Compulsory Cancellation of Registration
Cancellation is in these cases: –
(a) A person who contravenes the provisions of this Act or Rules made there under;
(b) A composition person who fails to furnish returns for 3 consecutive tax periods. (c) A person other than composition person who fails to furnish returns for 6 consecutive months
(d) A person who has sought voluntary registration but has failed to commence business within 6 months.
(e) Where registration has been obtained by way of fraud, wilful misstatement or suppression of facts
The Proper Officer gives reasonable opportunity to being heard to such unregistered person before proceeding to assess such person. Even though no return would have actually been filed in such case, the authority to pass such assessment order is extinguished on the expiry of 5 years from due date applicable for filing annual return for which the tax paid related.
For assessment notice has to be issued in FORM GST AMST-14 by Proper Officer. This notice would contain the ground on which the assessment is proposed to be made. The registered person is allowed to reply within 15 days. After considering the explanation the order has to be passed in FORM GST AMST- 15.
6. Summary assessment in certain special cases (Section 64)
What is summary assessment?
This assessment is used in a tax legislation to denote “fast track assessment” based on return filed by the assessee. This assessment is when, there will be a loss of revenue to the government. Provided to enforce recovery of dues from potential defaulters and the requires an assessment of the tax liability. In this assessment, pre-supposes the fact that the Proper Officer be in possession of sufficient grounds to believe that any delay will adversely affect the revenue.
All the conditions are to be satisfied:-
⇒ The Proper Officer must have evidence that there may be a tax liability.
⇒ The Proper Officer has obtained prior permission of Additional / Joint Commissioner to assess the tax liability summarily. The proper officer must have sufficient ground to believe that any delay in passing assessment order would result in loss of revenue.
Summary assessment under this Section of the CGST Act can therefore be construed in some sense as a ‘protective assessment’ carried out in special circumstances, where there are sufficient grounds to believe that taxable person will fail to make payment of any tax, penalty or interest, if the assessment is not completed immediately. Such failure to pay tax, penalty or interest must be due to reasons attributable to the tax payer Hence, summary assessment under this Section is not a substitute for assessment getting time barred. Further, mere possibility of non-payment cannot be a ground for resorting to summary assessment, unless there are factors indicating that such non-payment pertains to admitted or undisputed tax liability.
However, it is important to note that upon grant of permission by the Additional / Joint Commissioner, it appears that the evidence available with the Proper Officer or his apprehension of possible loss of revenue, cannot be called into question. The summary assessment order should be in FORM GST ASMT-16. The section allows the person who is assessed and is served the order so passed, to come forward and make an application in FORM GST ASMT–17 to the Additional / Joint Commissioner, which will then be examined and if the Additional/ Joint Commissioner is satisfied, the summary assessment order will be withdrawn.
SUMMARY OF FORMS TO BE FILLED UNDER ASSESSMENT
| FORM NAME | FILED BY | PURPOSE |
| GST AMNT-01 | ASSESSEE | FOR PROVISIONAL ASSESSMENT |
| GST ASMT-02 | PROPER OFFICER | GIVING PERMISSION FOR PROVISIONAL ASSESSMENT |
| GST ASMT-03 | ASSESSEE | REPLY TO THE OFFICER |
| GST ASMT-04 | PROPER OFFICER | REJECTION OF APPLICATION IF ANY OR PAYMENT OF TAXES |
| GST ASMT-05 | ASSESSEE | EXECUTE A BOND WITH BANK SECURITY |
| GST ASMT-06 | PROPER OFFICER | FINALISE THE ASSESSMENT AND GIVE FINAL OREDER OF ASSESSMENT |
| GST ASMT-07 | PROPER OFFICER | SPECIFFY THE AMOUNT PAYABLE OR REFUNDABLE |
| GST ASMT-08 | ASSESSEE | APPLICATION FOR RELEASE OF SECURITY |
| GST ASMT-09 | PROPER OFFICER | RELEASE OF SECURITY FURNISHED ORDER |
| GST ASMT-10 | PROPER OFFICER | NOTICE IF ANY DISCREPANCIES |
| GST ASMT-11 | ASSESSEE | EXPLANATION CALLED BY OFFICER IN ANY DISCREPANCIES ACCEPTED |
| GST ASMT-12 | PROPER OFFICER | EXPLANTION IN ANY DISCREPANCIES ACCEPTED AND THE PERSON INFORMED |
| GST ASMT-13 | PROPER OFFICER | ANY INTEREST OR PENALIES FOR LATE PAYMENT |
| GST ASMT-14 | PROPER OFFICER | NOTICE CONTAINING GROUND ON WHICH THE ASSESSEMT IS MADE |
| GST ASMT-15 | PROPER OFFICER | THE ORDER PASSED AFTER CONSIDERING THE REPLY FROOM ASSESSEE |
| GST ASMT-16 | PROPER OFFICER | SUMMARY ASSESSMENT ORDER |
| GST ASMT-17 | ASSESSEE | FOR APPLICATION FOR WITHDRAWN OF ASSESSEMET ORDER |
| GST ASMT-18 | PROPER OFFICER | WITHDRAWN OR REJECTION OF ASSESSMENT |
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any agency of the Indian. government. Examples of analysis performed within this article are only examples. They should not be utilized in real-world analytic products as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of any government entity.
The author is working in the GST Consulting domain and currently providing services related to GST Transition, Impact and Migration support on various clients. The author can be reached at bhupeshmoriya@gmail.com.
Really helpful…..nice work?