Assessment of Unregistered person as provided in Section 63 of CGST Act 2017 read with Rule 100 of CGST Rule 2017.
Scope:
♠ When the proper officer is in possession of some information and that is material for initiating the proceedings.
♠ The proper officer is vested with the power not only to identify transaction of taxable person* but also pass an order of assessment on best judgement assessment basis & initiate the recovery proceeding subject to fulfilment of certain conditions.
♠ Assessment under section 63 to be carried out independent of section 73 and Section 74.
Applicability:-
♠ To a person who are liable to obtain registration** and failed to do so u/s 22 of CGST Act 2017.
♠ To a taxable person where registration was cancelled u/s 29(2)*** of CGST Act 2017.
*Taxable Person: means a person who is registered or liable to be registered under section 22 or section 24 of the Act.
**Fails to obtain registration: Being conscious of the requirement to obtain registration will be required and as such come in for examination.
***Section 29(2) of the Act covers 5 instances where registration may be cancelled by proper officer:
(a) A person who contravenes the provisions of this Act or Rules made thereunder; or
(b) A composition person who fails to furnish returns for 3 consecutive tax periods; or
(c) A person other than composition person who fails to furnish returns for 6 consecutive months or
(d) A person who has sought voluntary registration but has failed to commence business within 6 months; or
(e) Where registration has been obtained by way of fraud, willful misstatement or suppression of facts.
Opportunity of being heard
Proper officer may assess the tax liability to the best of his judgement after providing opportunity of being heard to such person.
Assessment proceeding
(Substituted Rule 100 by N. No. 16/2019 central Tax dated 29/03/2019 w.e.f 1/04/ 2019)
It includes following process:
- For assessment under this provision, Proper officer shall issue notice in Form GST ASMT-14.
- The said notice would also be served electronically in Form GST DRC-01.
- The notice would contain the reasons/grounds on which assessment is proposed to be made on best judgment assessment basis.
- The taxable person is given a time of 15 days to furnish his reply.
- After considering said reply, order has to be passed in Form GST ASMT-15.
- Summary of such order to be uploaded electronically in Form GST DRC-07.
Time limit for passing the assessment order
The proper office to issue an assessment order in Form GST ASMT-15 with in 5 years from the date specified under Section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.
Order of Provisional attachment
The commission may during the pendency of any proceeding under section 63, pass an order in Form GST DRC-22, to attach any property including bank account belonging to taxable person provisionally to protect the interest of the revenue. (Section 80 of CGST Act)
Offences or Penalties in case of non-compliance with Provision
Section 122(xi) of CGST Act, where a taxable person, is liable to be registered under this Act but fails to obtain registration.
Such person shall be punished with a penalty that shall be higher of the amount of tax evaded or Rs. 10000 whichever is higher.
Section 127 of the CGST Act provides that where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceedings under section 62 or section 63 or section 64 or section 73 or section 74 or section 129 or section 130, he may issue an order levying such penalty after giving a reasonable opportunity of being heard to such person.
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