Every person registered under the Act shall himself assess the tax payable by him for a tax period and after such assessment he shall file the return required under Section 27 of Model GST Law.
According to the explanation to Section 44 of Model GST Law has such a provision. It provides that where goods received as on inward supply is returned by the recipient to the supplier within six months from the date of the relevant invoice , the tax payable on such supplies shall be equal to the input tax credit availed earlier on such inward supply. This provision essentially ensures that if the recipient returns the goods to the supplier within six months of the date of its original supply, his tax liability on such returned goods will be the same as was at the time of the original supply. If goods are returned after six months of the date of the original supply invoice, the rate of tax applicable will be the rate prevailing on date of such return.
For example Rama & Co., supplied goods to ‘Krishna & Co., in April, 2017, these goods were returned by ‘Krishna & Co., to ‘Rama & Co., on June, 2017. The rate charged by ‘Rama & Co., on such goods was 18%. In May, 2017 the rate was amended to 18.5%, the tax payable on return of such inward supply by ‘Krishna & Co., to ‘Rama & Co., is 18% only.
As a taxpayer has to pay tax on self assessment basis, a request for paying tax on provisional basis has to come from the taxpayer which will then have to be permitted by the proper officer. In other words, no tax officer can suo-moto order payment of tax on provisional basis. This is governed by section 44A of Model GST Law. Tax can be paid on a provisional basis only after the proper officer has permitted it through an order passed by him. For this purpose, the taxable person has to make a written requires to the proper officer, giving reasons for payment of tax on a provisional basis. Such a request can be made by the taxable person only in such cases where he is unable to determine:
- The value of goods or services to be supplied by him or
- Determine the tax rate applicable to the goods or services to be supplied by him.
In such cases the taxable person has to execute a bond in the prescribed form, and with such surety or security as the proper officer may deem fit.
The final assessment order has to be passed by the proper officer within six months from the date of the communication of the order of provisional assessment. However, on sufficient cause being show n and for reasons to be recorded in writing, the above period of six months may be extended.
- By the Joint or Additional Commissioner for a further period not exceeding six months and
- By the Commissioner for such further period as he may deem fit.
Where the tax liability as per the final assessment is higher than in provisional assessment, the taxable person be liable to pay interest. He will be liable to pay interest from the date the tax was due to be paid originally till the date of actual payment.
If the taxable person does not provide a satisfactory explanation within 30 days of being informed extendable by the officer concerned or does not take corrective action within a reasonable period after accepting the discrepancies, the Proper Officer may take recourse to any of the following provisions:
- Proceed to conduct audit under Section 49 of the Act;
- Direct the conduct of a special audit under Section 50 which is to be conducted by a Chartered Accountant or a Cost Accountant nominated for this purpose by the Commissioner; or
- Undertake procedures of inspection, search and seizure under Section 60 of the Act; or
- Initiate proceeding for determination of tax under Section 51 of the Act.
Under Section 46 of Model GST Law, Proper officer is not required to give any notice to taxable person before completing assessment. As this provision relates to ‘best judgment assessment. Hence giving a notice to the taxable person is not required.
The proper officer has to first issue a notice to the defaulting taxable person under Section 32 requiring him to furnish the return within a specified period of time, which as to be a minimum of fifteen days as per section 46 of Model GST Law. If the table person fails to file return within the given time, the proper officer shall proceed to assess the tax liability of the return defaulter to the best of his judgment taking into account all the relevant material available with him. This power is given under Section 46.
The best of judgment order passed by the Proper Officer under Section 46 of Model GST Law shall automatically stand withdrawn if the taxable person furnishes a valid return for the default period i.e. files the return and pays the tax as assessed by him, within thirty days of the receipt of the best judgment assessment order.
The time limit for passing an assessment order under section 46 or 47 is three or five years from the due date for filing the annual return.
Section 47 of Model GST Law provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgement for the relevant tax periods. However, such an order must be passed within a period of five years from the due date of filing of the annual return for the financial year to which non payment of tax relates.
The proper officer can assess the tax liability and pass an order to his best of judgment for the relevant tax periods as per the Section 47. However, such an order must be passed within a period of five years from the date of filing of the annual return for the financial year which non payment of tax relates.
Summary assessments can be initiated to protect the interest of revenue under section 48 of Model GST law when:
- The Proper officer has evidence that a taxable person has incurred a liability to pay tax under the Act, and
- The proper officer believes that delay in passing an assessment order will adversely affect the interest of revenue.
A tax able person against whom a summary assessment order has been passed can apply for its withdrawal to the jurisdictional Additional or Joint Commissioner within thirty days of the date of receipt of the order. If the said officer finds the order erroneous, he can withdraw it and direct the proper officer to carry out determination of tax liability in terms of Section 51. The Additional or Joint Commissioner can follow a similar course of action on his own motion if he finds the summary assessment order to be erroneous under section 48 of Model GST law.
No summary assessment order to be necessarily passed against the taxable person. In certain cases like when goods are under transportation r are stored in a warehouse, and the taxable person in respect of such goods cannot be ascertained, the person in charge of such goods shall be deemed to be the taxable person and will be assessed to tax under Section 48.
As per section 49 of Model GST Law any officer of CGST or SGST authorised by his Commissioner by a general or specific order may conduct audit of a taxpayer. The frequency and manner of audit will be prescribed in due course.
Prior intimation is required and the taxable person should be informed at least 15 days prior to conduct of audit.
The audit is required to be completed within 3 months from the date of commencement of audit or within a further period of a maximum of 6 months subject to the approval of the Commissioner.
The term ‘Commencement of audit’ is important because audit has to be completed within a given time frame in reference to this date of commencement. Commencement of audit means the late of the following:-
- The date on which the records or accounts called for by the audit authorities are made available to them, or
- The actual institution of audit at the place of business of the taxpayer.
When a taxable person received notice of audit then the taxable person is required to:
- Facilitate the verification of accounts and or records available or requisitioned by the authorities.
- Provide such information as the authorities may require for the conduct of the audit and
- Render assistance for timely completion of the audit.
The proper officer must without delay inform the taxable person about his findings, reasons for findings and the taxable person’s rights and obligations in respect of such findings.
A special audit can be instituted in limited circumstances where during scrutiny, investigation etc., it comes to the notice that a case is complex or the revenue stake is high. The power is given in section 50 of Model GST Law.
The Assistant or Deputy Commissioner is to serve the notice for special audit only after prior approval of the Commissioner.
A Chartered Accountant or a Cost Accountant so nominated by the Commissioner may undertake the audit.
The auditor will have to submit the report within 90 days or within the further extended period of 90 days.
The expenses for examination and audit including the remuneration payable to the auditor will be determined and borne by the Commissioner.
Based on the findings and or observations of the special audit, action can be initiated under Section 51 of Model GST Law.
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