GST Assessment: Types and Their Significance

Every registered person has to file return to the GST department. Once the person files the return, the next step is processing the return by the GST department. The GST department examines the returns for its correctness. The process of examining the return is called assessment.

Types of Assessment under GST

Here is a summary of the GST assessment forms

Assessment under section 59 | Summary Assessment

Registered taxable people shall themselves determine their taxes payable and furnish a return for each tax period. This process is generally known as self-assessment.

Assessment under section 60 | Provisional Assessment

In case a supplier is unable to determine the value of goods or services or both or to determine the rate of tax applicable thereto, a supplier can request a provisional assessment from the officer.

The supplier requesting for payment of tax on a provisional basis has to furnish an application along with the documents in support in FORM GST ASMT-01.The officer will scrutinize the application in FORM GST ASMT-01. In case, additional information or documents in support is required to decide the case, notice in FORM GST ASMT - 02 will be issued to the supplier requesting for submission of the same. The supplier has to file a reply to the notice in FORM GST ASMT - 03.The officer will then issue an order in FORM GST ASMT-04 within a period not later than ninety days from the date of receipt of the request, allowing the payment of tax on a provisional basis.The order will indicate the value or the rate or both on the basis of which the assessment is to be allowed on a provisional basis and the amount (this amount shall include the amount of integrated tax, central tax, state tax or union territory tax and cess payable in respect of the transaction) for which the bond is tobe executed along with the security to be furnished. The security will not exceed twenty-five percent of the amount covered under the bond.

The supplier has to execute the bond in FORM GST ASMT-05 along with a security in the form of a bank guarantee for an amount as mentioned in FORM GST ASMT-04.On executing the bond the process of the provisional assessment is complete and the supplier can supply the goods or services or both and pay the tax at the rate or on the value that has been indicated in the order in FORM GST ASMT-04.

The provisional assessment will be finalized, within a period not exceeding six months from the date of issuance of FORM GST ASMT-04.

The officer will issue a notice in FORM GST ASMT-06, calling for information and records required for finalization of assessment and shall issue a final assessment order, specifying the amount payable or the amount refundable, if any, in FORM GST ASMT-07.

On sufficient cause being shown and for reasons to be recorded in writing, the time limit for finalization of provisional assessment can be, extended by the Joint Commissioner or Additional Commissioner for a further period not exceeding six months and by the Commissioner for such further period not exceeding four years.

In case any tax amount becomes payable subsequent to finalization of the provisional assessment, then interest at the 18% will also be payable by the supplier from the first day after the due date of payment of the tax till the date of actual payment, whether such amount is paid before or after the issuance of order for final assessment. In case any tax amount becomes refundable subsequent to finalization of the provisional assessment, then interest (subject to the eligibility of refund and absence of unjust enrichment) at the 6% will be payable to the supplier.

Once the order in FORM GST ASMT-07 is issued, the supplier has to file an application in FORM GST ASMT- 08 for the release of the security furnished. On receipt of this application, the officer will issue an order in FORM GST ASMT–09 within a period of seven working days from the date of the receipt of the application, releasing the security after the amount payable if any as specified in FORM GST ASMT-07 has been paid.

Assessment under Section 61 | Scrutiny Assessment

The officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform to the supplier of the discrepancies noticed, if any, in FORM GST ASMT– 10. Then the supplier will provide explanation in FORM GST ASMT – 11 within 30 days.

In case the explanation is found acceptable, the registered person shall be informed accordingly in FORM GST ASMT – 12, and no further action shall be taken in this regard.

In case the explanation is not found acceptable, may initiate appropriate action including those under section 65 (Audit by tax authorities)or section 66 (Special audit) or section 67 (Power of inspection, search and seizure), or proceed to determine the tax and other dues under section 73 or section 74 (demand and recovery related provisions).

Assessment under section 62 & 63 | Best Judgement Assessment

• Section 62 - Assessment of non-filers of returns -  Where a registered person fails to furnish the return under section 39 (Furnishing of returns) or section 45 (Final return), even after the service of a notice under section 46 (Notice to return defaulters), the officer may proceed to assess the tax liability of the said person to the best of his judgement 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 (31st December of next financial year) under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates. Where the registered person furnishes a valid return within sixty days of the service of the assessment order , the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest @18% under sub-section (1) of section 50 or for payment of late fee (200 per day during which such failure continues subject to a maximumof an amount calculated at a 0.25% of turnover) under section 47 shall continue.
• Section 63 - Assessment of unregistered persons - Where a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under sub-section (2) of section 29 but who was liable to pay tax, the officer may proceed to assess the tax liability of the said person to the best of his judgement 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 (31st December of next financial year) under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.

Assessment under section 64 | Summary Assessment

The officer may, on any evidence showing a tax liability of a person coming to his notice, with the previous permission of Additional Commissioner or Joint Commissioner, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue.

It appears from the proviso that provisions of summary assessment are applicable only in respect to supply of goods. Summary assessment completed in order to immediate recovery of tax from the potential tax defaulter.