♦ INTRODUCTION

Assessment means determination of tax liability. There are several types of assessments in the GST regime i.e., self-assessment, provisional assessment, summary assessment and best judgment assessment. Under GST, an assessee is first required to self- assess his tax liability and furnish returns for declaring the taxable turnover, tax payable or refundable, input tax credit availed etc. (i.e., self-assessment). At this stage, there is no intervention by the tax officials.

Since the tax regime relies on self-assessment, there is a need to put in place a robust ‘audit’ mechanism in order to measure and ensure proper compliances of the provisions of law by the taxable person.

♦ SECTION 59 TO 64: DIFFERENT TYPES OF ASSESSMENT UNDER GST

Assessment under GST

♦ SECTION 65 TO 66: AUDITS UNDER GST

Audits
Sec 65: Audit by Tax Authorities Sec 66: Special Audit
Commissioner or any officer authorized by him may undertake audit of any registered person At any stage of scrutiny, inquiry or investigation
Audit may be conducted at the place of business or in their office Assistant Commissioner is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits
At least 15 days prior notice should be given May nominate a Chartered Accountant or Cost Accountant
Time Period: 3 months from the date of conduct of audit Time period: 90 days
Extension: not exceeding six months Extension: 90 days
On conclusion, registered person shall be informed about findings, rights and obligations Audit will be conducted even if accounts have already been audited
If result in demand of tax, proceedings may be initiated under section 73 or 74 If result in demand of tax, proceedings may be initiated under section 73 or 74

♦ SECTION 73 & SECTION 74: DETERMINATION OF TAX NOT PAID/ SHORT PAID / ERRONEOUSLY REFUNDED/ ITC WRONGLY AVAILED/ UTILISED

S.No Action by tax payer Amount  of  penalty payable Remarks
Normal Cases Fraud Cases
1 Tax amount, along with the interest*, paid before issuance of notice No   penalty and no notice shall be issued 15% of the tax amount payable as penalty and no notice shall be not be issued The penalty shall also be not chargeable in cases where the self-assessed
2 Tax amount, along with the interest, paid within 30 Days of issuance of notice No penalty. All proceedings deemed to be concluded 25% of the tax amount payable as penalty. All proceedings deemed to be concluded. Tax or any amount collected as tax is paid (with interest) within 30 days from the due date of payment.
3 Tax amount, along with the interest paid within 30 days of communication of order 10% of the tax amount or Rs. 10,000/-, whichever is higher 50% of the tax amount payable as penalty. All proceedings deemed to be concluded.
4 Tax amount, along with the interest paid after 30 days of communication of order 10% of the tax amount or Rs. 10,000/-, whichever is higher 100% of the tax amount

*Interest shall be applicable as per section 50 at rate of 18%/24% respectively.

♦ TIME LIMIT FOR ISSUANCE OF NOTICE AND ORDER

S. No Nature of case Time for issuance of notice Time for issuance of order
1 Normal case Within 2 years and 9 months from the due date of filing Annual Return for the Financial year to which the demand pertains or from the date of erroneous refund Within 3 years from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from the date of erroneous refund
2 Fraud Cases Within 4 years and 6 months from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from the date of erroneous refund Within 5 years from the due date of filing of Annual return for the Financial Year to which the demand pertains or from the date of erroneous refund
3 Any amount collected as tax but not paid No time limit Within 1 year from the date of issuance of notice
4 Non-payment of self-assessed tax No need to issue a SCN Recovery proceedings can be started directly

CONCLUSION:

Assessments have been initiated by the GST department for the previous years. It is thus required for the assessee to understand the nature of assessment and be prepared for responses. As a proactive measure, an Assessee shall maintain proper documentation of all required records, sales reco, ITC reco and be prepared for scrutiny from department.

Authors:

CA Shreyans Dedhia | Partner |[email protected]

Meet Faria | Associate Consultant |[email protected]

Author Bio

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