The mechanism of collection under Goods & Service Tax regime is based on filing of various returns by taxpayers each month/quarter. But the returns filed and tax paid for a particular period is not something which is deemed final, the government authorizes the Central Board of Indirect Taxes and Customs (CBIC) and its officers for assessing the returns filed and amount of tax deposited and empowers them to collect tax dues if any. This procedure of assessment emanates from various provisions enshrined under Central GST Act and relevant State GST Acts, which are discussed as under.
Self Assessment u/s 59
Every registered taxpayer under GST is required to file various monthly/quarterly returns and discharge due taxes as per details furnished in such returns. The details furnished and tax dues paid are deemed correct if any discrepancy is not found.
Provisional Assessment u/s 60
If a situation so arises in which the taxpayer is not able to assess the tax payable on his own or he is not able to determine what rate of tax is chargeable in his case, the taxpayer can request the proper officer for determination of tax payable by filing FORM GST ASMT-01. The proper officer in such cases is required to determine the amount of tax payable, after calling for relevant information in FORM GST ASTM-02 and issue order within 90 days from receipt of such request [Sub Section 1].
The tax payer is required to execute a bond in FORM GST ASMT-05 along with prescribed amount of security proper officer, but not exceeding 25% of value of bond, which will bind the taxpayer for payment of differential tax, if any, at the time of final assessment [Sub Section 2].
The proper officer is required to finalize the assessment and order the same within 6 months from date of provisional order after calling for information in FORM GST ASMT-06 and considering all the relevant facts [Sub Section 3]. Taxpayer can file for release of security in FORM GST ASMT-08 and proper officer, after ensuring payment of all dues, may release such security.
The provisions of interest on delayed payment of taxes and interest on refunds are also applicable in case of provisional assessment [Sub Section 4 & 5]
Scrutiny Assessment u/s 61
The proper officer has the power to scrutinize the returns furnished by taxpayer and call for explanations to discrepancies found, by issuing notice in FORM GST ASMT-10 [Sub Section 1]. The taxpayer can submit his reply along with supporting documents in FORM GST ASMT-11, within 30 days of notice received. If the reply submitted is found satisfactory by the proper officer, then he shall issue order for same in FORM GST ASMT-12 [Sub Section 2].
If no satisfactory reply is received by the proper officer within prescribed time or as extended, proper officer can take further action in form of departmental audit u/s 65, summary assessment u/s 64, undertake search u/s 67 or he can initiate proceedings u/s 73/74/74A.
Though there is no prescribed time barring limitation for scrutiny u/s 61, practically, for further actions u/s 73/74/74A, there is different time barring limitation under each section.
Summary Assessment u/s 64
The provisions of summary assessment are protective in nature. The proper officer can, with prior permission of Additional/Joint Commissioner, assess tax liability of the taxpayer and order, if he has sufficient grounds to believe that delaying the assessment will result in harm to the interest of revenue. The order is made in FORM GST ASMT-16 along with summary of tax payable in FORM GST DRC-07 [Sub Section 1].
The taxpayer aggrieved by such Summary Assessment may request the Additional/Joint Commissioner in FOMR GST ASMT-17 within 30 days for withdrawal of order. The Additional/Joint Commissioner can also withdraw such order on his own if he finds it erroneous. When order of summary assessment is withdrawn, procedures laid down u/s 73/74/74A are required to be followed [Sub Section 2].
Assessment of Non-Filers u/s 62
The provisions of this section are similar to the ‘Best Judgement Assessment’ provisions under the income tax act. Where a taxpayer fails to file his returns required to be filed, and even fails to do so after issuance of notice for filing, the proper officer can assess tax payable on basis of information and facts available using best of his judgement. The order of such assessment is made in FORM GST ASMT-13 along with summary of tax payable in GST DRC-07 [Sub Section 1].
The taxpayer has an option to file delayed returns with applicable late fee and interest within 60 days of issuance of order, if he so does, then the order of assessment shall stand withdrawn. Also, failure to file within 60 days of order can also be condoned within further 60 days, when the taxpayer files delayed returns with applicable late fee and interest and with additional late fee of Rs. 100/day per act, starting from 61st day since issuance of order [Sub Section 2].
Such assessment can be made within 5 years from due date of Annual Return specified u/s 44 [Sub Section 1].
Assessment of Un-Registered Person u/s 63
For persons liable for registration under GST, and who does not register themselves, the proper officer can assess tax liability of such person on basis of best of his judgement and as per information and facts available with him. The proper officer is required to issue notice in FORM GST ASMT-14, detailing the basis of assessment, along with summary of tax payable in FORM DRC-01. The person such assessed has time of fifteen days to reply to notice issued, after which proper office will order assessment in FORM GST ASMT-15 along with summary of tax payable in FORM DRC-07. These provisions are also applicable for taxpayers whose registration is cancelled, but he is liable to pay tax.
Such assessment can be made within 5 years from due date of Annual Return specified u/s 44.
As we can understand from above discussion, filed GST returns and paid taxes can only reach finality only when assessment is made, or when time period for scrutiny is exhausted. I hope that this piece of writing enhances or recapitulates your ocean of knowledge.
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