Section 62 CGST Act – Detailed Analysis

Now-a-days a sms alert is being received to the Tax Payer from the GST Department in regard to non-filing of return. Format of the SMS is as under:

Alert SMS:07AA……….ZX is GSTR1 defaulter.Pl file return else best judgment assessment will be done U/s 62 of DGST ACT. Ignore if filed DT&T,GNCTD 

What is section 62 of the CGST Act ? 

The Section 62 of the CGST Act is reproduced as under: 

(1) Notwithstanding anything to the contrary contained in section 73 or section 74, where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates. 

(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.

The provisions of the section are analyzed as under:

1. This section empowers the proper officer to assess the tax liability of the said person who had not furnished returns which are required to be furnished under section 39 and section 45. The returns specified under section 39 and section 45 are as under:

2. Before assessing the liability, the Proper Officer shall issue notice in form GSTR-3A as per section 46 read with rule 68 to furnish the return within fifteen days. The notice shall be issued electronically.

3. The Tax Liability shall be assessed by best judgement of the Proper Officer while taking into account all the relevant material which is available or which he has gathered.

4. Limitation Period to issue the Assessment Order– Such Assessment Order shall be issued within five years from the due date for furnishing of the Annual Return for the financial year to which this assessment pertains. For example, if returns not furnished for the financial year 2018-19 then assessment order for such returns shall be issued within period of five years from the date 31-12-2019. The date 31-12-2019 was due date to furnish the Annual Return for the F.Y.2018-19.

5. Assessment Order deemed to be withdrawn if the registered person furnishes a valid return within thirty days of the service of the assessment order.

6. Valid Return means as per section 2(117) of the CGST Act is “valid return” means a return furnished under sub-section (1) of section 39 on which self-assessed tax has been paid in full.”

7. Liability to pay interest and late fee shall have to pay by the registered person according to law.

Circular

Standard Operating Procedure guidelines issued by the Department vide Circular No. Circular No. 129/48/2019 dated 24-12-2019.

4. Following guidelines are hereby prescribed to ensure uniformity in the implementation of the provisions of law across the field formations:

(i) Preferably, a system generated message would be sent to all the registered persons 3 days before the due date to nudge them about filing of the return for the tax period by the due date.

(ii) Once the due date for furnishing the return under section 39 is over, a system generated mail / message would be sent to all the defaulters immediately after the due date to the effect that the said registered person has not furnished his return for the said tax period; the said mail/message is to be sent to the authorized signatory as well as the proprietor/partner/director/karta, etc.

(iii) Five days after the due date of furnishing the return, a notice in FORM GSTR-3A (under section 46 of the CGST Act read with rule 68 of the CGST Rules) shall be issued electronically to such registered person who fails to furnish return under section 39, requiring him to furnish such return within fifteen days;

(iv) In case the said return is still not filed by the defaulter within 15 days of the said notice, the proper officer may proceed to assess the tax liability of the said person under section 62 of the CGST Act, to the best of his judgement taking into account all the relevant material which is available or which he has gathered and would issue order under rule 100 of the CGST Rules in FORM GST ASMT-13. The proper officer would then be required to upload the summary thereof in FORM GST DRC-07;

(v) For the purpose of assessment of tax liability under section 62 of the CGST Act, the proper officer may take into account the details of outward supplies available in the statement furnished under section 37 (FORM GSTR-1), details of supplies auto-populated in FORM GSTR-2A, information available from e-way bills, or any other information available from any other source, including from inspection under section 71;

(vi) In case the defaulter furnishes a valid return within thirty days of the service of assessment order in FORM GST ASMT-13, the said assessment order shall be deemed to have been withdrawn in terms of provision of sub-section (2) of section 62 of the CGST Act. However, if the said return remains unfurnished within the statutory period of 30 days from issuance of order in FORM ASMT-13, then proper officer may initiate proceedings under section 78 and recovery under section 79 of the CGST Act;

5. Above general guidelines may be followed by the proper officer in case of non-furnishing of return. In deserving cases, based on the facts of the case, the Commissioner may resort to provisional attachment to protect revenue under section 83 of the CGST Act before issuance of FORM GST ASMT-13.

6. Further, the proper officer would initiate action under sub-section (2) of section 29 of the CGST Act for cancellation of registration in cases where the return has not been furnished for the period specified in section 29.

To reach to me for any suggestions, rectifications, amendments and/or further clarifications in regard of this article my email address is [email protected].