GST- Section-60 Provisional Assessment

Introduction- Section 60 Provisional Assessment

♦ Where the taxable person is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on a provisional basis and

♦The proper officer shall pass an order within a period not later than ninety days from the date of receipt of such request, allowing payment of tax on provisional basis at such rate or on such value as may be specified by him.

♦Taxable person have to execute a bond and with such security as proper officer may deem fit , binding the taxable person for payment of the difference between the amount of tax as may be finally assessed and the amount of tax provisionally assessed.

Can we Apply for Provisional Assessment in all cases…?

• The facility of provisional assessment is available only in the cases of valuation and determination of rate of tax.
• The provisions of this section cannot be extended for any other purpose or subject matter. For example,
  • Whether (IGST or CGST-SGST) applicable,
  • What will be time of supply,
  • Whether supplies to be treated as “supply of goods” or “supply of services”,
  • Admissibility of ITC,
  • Quantum of reversal of ITC,
  • Whether a particular action is supply or not

In the aforesaid kind or classes of cases, recourse is not available to provisional assessment

Provisional assessment cannot be treated to be a substitute for Advance Ruling.

Provisional Assessment Procedure

Interest Payable on Short Payment

• The registered person shall be liable to pay interest on any tax payable on the supply of goods or services or both under provisional assessment but not paid on the due date as per section 39, at the rate specified under Section 50, from the first day after the due date of payment of tax till the date of actual payment.
• whether such amount is paid before or after the issuance of order for final assessment

Time Limit for Issuing Order Under Section-60

• A final assessment order shall be passed by the proper officer in FORM GST ASMT-07, specifying the amount payable or refundable to the registered person within a period of 6 months from the date of communication of provisional assessment order.
• However, on sufficient cause being shown and for reasons to be recorded in writing, this period can be extended by
• Additional / Joint Commissioner

-Maximum of 6 months

• Commissioner

-Maximum of 4 years

Let’s Summarize..

• The registered person must avail this opportunity of provisional assessment after much thought and careful consideration.
• Any claim for refund of taxes paid in excess under this section would be processed in accordance with Section 54 (refund provision) and
• Is subject to the concept of “unjust enrichment u/s 54(8)(e).
• Hence if where the registered person has not borne the incidence of tax and has passed on the burden to some other person, then
•  Instead of granting refund to the applicant, it shall be credited to consumer welfare fund.
• The application for refund is required to be made within 2 years from the relevant date as per Section 54.