Assessment and Audit play an important part in any tax administration. Goods and Services tax law is primarily based on self-assessment. The tax payer would avail the off set of input credit of taxes against his final liability to settle balance taxes which would be paid in cash.
Since, the tax is to be self-assessed, there is a need for assessment and audit to ensure proper payment of tax. GST law mandates every registered person to self assess the tax payable under the Act and to furnish return for each tax period as specified under the law.
1.1 Provisional Assessment:
There may be situations a registered person is not able to determine value of goods or services (or both) or rate of tax applicable and he may opt for provisional assessment.
1.2 Procedure of Provisional Assessment:
Any taxable person who is unable to determine value or rate of tax applicable on goods or services or both, may request in writing to the officer to pay tax on provisional basis in FORM GST ASMT-01. The officer shall issue a notice in FORM GST ASMT – 02 requiring the person to appear or furnish additional information. The registered person shall file reply in FORM GST ASMT – 03. The officer shall pass an order in FORM GST ASMT – 04 within 90 days of receipt of request, either rejecting or allowing payment of tax on provisional basis.
1.3 Furnishing Bond and Bank Guarantee:
On order of officer, the registered person shall furnish a bond in FORM GST ASMT – 05 along with bank guarantee for the amount as specified in the order.
1.4 Final assessment:
The officer shall issue notice in FORM GST ASMT – 06 calling for information and required to finalise the assessment and shall issue final order in FORM GST ASMT – 07 and shall specify the amount payable by the registered person or the amount refundable.
1.5 Release of Security:
The registered person shall file an application in FORM GST ASMT – 08 post final assessment for release of security and bank guarantee. The security shall be released within 7 days of receipt of application and order in FORM GST ASMT – 09 shall be passed.
2.0 Scrutiny of Returns:
Returns may be scrutinized to verify correctness of the return. In case of any discrepancy noticed the officer shall issue notice in FORM GST ASMT – 10 informing the discrepancy and seek explanation within 15 days from date of service of notice.
2.1 Acceptance of discrepancy and payment of tax:
The registered person can accept the discrepancy and pay the tax, interest and other amount and inform the same with explanation for discrepancy in FORM GST ASMT – 11. If the explanation provided is satisfactory, the officer shall inform the Registered Person in FORM GST ASMT – 12
3.0 Assessment in case of failure to file returns:
If a registered person fails to furnish returns even after service of notice, the officer shall assess the liability of such person to the best of his judgment taking into account the material available with him or he has gathered and issue assessment order in FORM GST ASMT – 13 within 5 years from the date specified for filing Annual Return. If the registered person furnishes return within 30 days of service of assessment order, the assessment order shall be deemed to have withdrawn but liability for payment of interest and late fees shall remain.
3.1 Assessment of unregistered persons:
If a taxable person fails to obtain registration though liable to register or registration is cancelled (for contravention of provisions of the Act, failure to file returns, not commencing business within 6 months of taking voluntary registration or registration obtained due to fraud) but is liable to pay tax, the officer shall issue notice in FORM GST ASMT – 14 and proceed with assessment on his best judgment after allowing time of 15 days to furnish reply and pass order in FORM GST ASMT – 15.
3.2 Summary Assessment in special cases:
Where there is an evidence of tax liability of certain person, the officer (with previous permission of Additional Commissioner or Joint Commissioner) may proceed to assess tax liability of such person. The order shall be issued in FORM GST ASMT – 16.
Where the taxable person to whom liability the liability pertains is not ascertainable, the person in charge of goods shall be deemed to taxable person liable to be assessed and pay tax. The person may file an application in FORM GST ASMT – 17 for withdrawal of summary assessment.
The order of withdrawal or rejection shall be issued in FORM GST ASMT – 18.
Audit of any registered person may be undertaken by Commissioner or any officer authorized by him. Audit may be conducted for a financial year or multiples thereof. The audit shall be conducted at the place of business of the registered person or in the office of Commissioner or officer authorized by him. Officer shall issue notice in FORM GST ADT -01.
A notice of 15 working days shall be given before initiating the audit and audit shall be completed within 3 months from commence of audit. Commissioner may extend the same by further period not exceeding 6 months. Date of commencement of audit shall be counted from the day when records and documents are made available by registered person or actual institution of audit at place of business, whichever is earlier.
The officer shall intimate to the registered person of any discrepancy noticed during the audit as observations of audit. The taxable person shall file reply and officer shall take into account the reply submitted in finalizing the audit report.
Officer shall intimate the findings of the audit to registered person in FORM ADT – 02.
5.0 Special Audit:
If during the stage of any scrutiny, inquiry, investigation or any proceedings before any officer (not below the rank of Assistant Commissioner) may with the prior approval of Commissioner direct a special audit in FORM GST ADT -03 to be conducted by a Chartered Accountant or Cost Accountant. The Officer, before directing special audit, shall have regard to the nature and complexity of the case and interest of revenue (value not correctly declared or credit availed is not within normal limits).
The audit report is to be submitted within 90 days to the said Assistant Commissioner. The period of conducting audit may be extended for a further period of 90 days.
The expenses of examination and audit of records including remuneration of Chartered Accountant or Cost Accountant, shall be determined and paid by the Commissioner.
The findings of the special audit shall be informed to the registered person in FORM GST ADT – 04.
About the Author: Author Rohit Kumar Singh is a Fellow Member of ICSI, an Associate Member of ICAI and ICMAI, a Law Graduate (Gold Medalist). He is currently heading GSP (GST Suvidha Provider) Business at Karvy Data Management Services Private Limited. He was associated with PriceWaterHouseCoopers Private Limited (PwC), Hyderabad as Manager handling IDT and GST initiatives. Prior to this he was with Gammon India Limited heading Indirect tax function of T&D Division. He may be reached at email@example.com or +91-9503031788.