All about GST assessment

ASSESSMENT

As per Section 2(11) CGST Act 2017- 'Assessment' means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment,summary assessment and best judgement assessment.

There are several types of assessments under CGST Act-

1. Self-assessment
2. Provisional Assessment
3. Scrutiny of tax returns filed by registered taxable persons
4. Assessment of registered taxable person who have failed to file the tax returns
5. Assessment of unregistered persons
6. Summary Assessment in certain special cases

Self Assessment

The principles of self-assessment were contained in Central Excise Law, Service Tax Law as well as VAT Laws and GST regime continues to promote the scheme of self-assessment. Hence, Every registered person is required to assess his tax dues in accordance with the provisions of GST Act. Self-assessment means an assessment by the tax payer himself not by Proper Officer.

As per Section-59 CGST Act 2017-

Every registered person shall self assess the taxes payable under this Act and furnish a return for each tax period as specified under section 39.

Provisional assessment

A provisional assessment is permitted under Central Excise Act and also under Finance Act 1994 and GST regime also continues to promote the scheme of Provisional assessment.

A Provisional assessment can be resorted to in the following situations:

(i) Taxable Person unable to determine Value of supply
(ii) Taxable Person unable to determine rate of tax applicable on supply

As per Section-60 of CGST Act 2017 read with CGST Rules 98

• Where Taxable Person is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may furnish an application along with the documents in support of his request, electronically in FORM GST ASMT-01 for payment of tax on a provisional basis.
• If proper officer wants additional information or documents in support of application, he may issue a notice in FORM GST ASMT-02 to registered person to furnish the same.
• Applicant shall file a reply to the notice in FORM GST ASMT - 03 and may appear in person before the said officer if he so desires.
• Proper officer shall issue an order in FORM GST ASMT-04 allowing the payment of tax on a provisional basis indicating the value or the rate or both on the basis of which the assessment is to be allowed on a provisional basis.
• Payment of tax on provisional basis may be allowed, if Taxable person executes a bond in in FORM GST ASMT-05 along with a security in the form of a bank guarantee for an amount as determined and with such surety or security as the 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.

Note: Amount for which the bond is to be executed and security to be furnished not exceeding 25%  of amount covered under the bond.

• Proper officer shall issue a notice in FORM GST ASMT-06, calling for information and records required for finalization of assessment .
• Proper officer shall, within a period of 6 months from the date of the communication of order issued , pass the final assessment order in FORM GST ASMT-07 after taking into account such information as may be required for finalizing the assessment:
• Joint Commissioner or Additional Commissioner may extend for a further period not exceeding 6 months and Commissioner may extend for such further period not exceeding 4 years, on sufficient cause being shown and for reasons to be recorded in writing.
• Registered person shall be liable to pay interest on any tax payable on supply of goods or services or both under provisional assessment but not paid on the due date specified under section 39(7) or the rules made thereunder, at the rate specified under section 50(1), from the first day after the due date of payment of tax in respect of the said supply of goods or services or both till the date of actual payment, whether such amount is paid before or after the issuance of order for final assessment.
• Where Registered person is entitled to a refund consequent to the order of final assessment, subject to the provisions of section 54(8), interest shall be paid on such refund as provided in section 56.
• Applicant may file an application in FORM GST ASMT-08 for the release of the security furnished after issue of the order.
• Proper officer shall release the security after ensuring that applicant has paid the amount and issue an order in FORM GST ASMT-09 within a period of 7 working days from the date of the receipt of the application.

Scrutiny of returns

The provisions as to scrutiny of returns were also present in Service Tax / Central Excise and State VAT laws and the same continue in GST regime. In GST regime Proper Officer has a discretionary power to scrutinize returns filed by registered persons to verify the correctness of the return and registered person will have to give explanation for the same. If no satisfactory explanation is furnished by registered person or fails to furnished explanation, proper officer may initiate appropriate action.

As per Section-61of CGST Act 2017 read with CGST Rules -99

• Proper officer may scrutinize the return and related particulars furnished by registered person to verify the correctness of return and inform him of the discrepancies noticed in FORM GST ASMT-10, if any and seek his explanation within 30 days from the date of service of the notice or such further period as may be permitted by him and also, where possible, quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy.
• Registered person may accept the discrepancy mentioned in the notice issued and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy in FORM GST ASMT-11 to proper officer.
• Where the explanation is found acceptable, registered person shall be informed by proper officer accordingly in FORM GST ASMT-12 and no further action shall be taken in this regard.
• Proper officer may initiate appropriate action , if no satisfactory explanation is furnished or where registered person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted .

Assessment of non-filers of returns

If registered person fails to furnish the return, Proper Officer may after serving him notice proceed to assess the tax liability in accordance with the provision of Rule 100 to the best of his judgment, taking into account all the relevant material available on record and issue an assessment order.

This is also known as ‘Best Judgment Assessment’.

Also note that it can be completed without giving notice of hearing to registered person.

As per Section-62 of CGST Act 2017 read with CGST Rules-100

• 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, proper 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 in FORM GST ASMT-13 within a period of 5 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.
• Where registered person furnishes a valid return within 30 days of the service of the assessment order under section 62(1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under section 50(1) or for payment of late fee under section 47 shall continue.

Assessment of unregistered persons

Under GST, Section-63 of CGST Act is applicable to unregistered persons i.e., persons who are liable to obtain registration under Section 22 but failed to obtain registration. This provision also covers the cases whose registration was cancelled as per section 29(2) claiming of the GST Act.

In such cases, the proper officer is required to give a reasonable opportunity of being heard to such persons before proceeding to assess such person.

As per Section -63 of CGST Act 2017 read with CGST Rules -100

• Proper officer shall issue a notice to a taxable person in accordance with the provisions of section 63 in FORM GST ASMT-14 containing the grounds on which the assessment is proposed to be made on best judgment basis.
• Where a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under section 29(2) but who was liable to pay tax, the proper officer may proceed to assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods and issue an assessment order in FORM GST ASMT-15 within a period of 5 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:
• No such assessment order shall be passed without giving the person an opportunity of being heard.

Summary assessment in certain special cases

As per Sec-64 CGST Act read with CGST Rules-100

• Proper 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 in FORM GST ASMT-16, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue.
• Person referred to section 64(2) may file an application for withdrawal of the summary assessment order in FORM GST ASMT-17
• Where taxable person to whom the liability pertains is not ascertainable and such liability pertains to supply of goods, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and liable to pay tax and any other amount due under this section.
• On an application made by taxable person within 30 days from the date of receipt of order passed under section 64(1) or on his own motion, if Additional Commissioner or Joint Commissioner considers that such order is erroneous, he may withdraw such order and follow the procedure laid down in section 73 or section 74.
• Order of withdrawal or, as the case may be, rejection of application under section 64(2) shall be issued in FORM GST ASMT-18.

Forms related to Assessment