Assessment (Section 2(11) of The CGST Act, 2017) - Assessment means determination of tax liability under this act and it include self- assessment, re-assessment, provisional assessment, summary assessment and best judgement assessment.
Let's discuss the when, which assessment is appropriate under the GST Laws.
1. Self-Assessment (Section 59, The CGST Act, 2017)
Every registered taxable person shall self-assess the taxes payable under this Act and furnish a return for each tax period as specified under Section 39.
It is important to note that 'self-assessment' does not confer authority of an assessing officer (called Proper Officer) on the taxpayer. Taxpayer must exercise this liberty to assess tax liability voluntarily with the perils of interest and penalty for any miscalculations or misinterpretations without usurping the role of Proper Officer. Self-assessment does not mean 'unsupervised self-administration'.
2. Provisional Assessment (Section 60, The CGST Act, 2017)
Provisional Assessment is done for temporary purpose, after every provisional assessment, there must be a final assessment. Taxable person will request to the proper officer for provisional assessment if he is unable to make self-assessment of his liabilities.
Conditions under which provisional assessments can be requested-
- When taxable person is unable to determine the value of goods or services.
- Rate of tax applicable on the supply cannot be determined by the taxable person.
Procedure of Provisional Assessment-
Step 1- Application for Provisional Assessment-
Registered person will furnish an application along with necessary supporting documents in Form GST ASMT-01, the provisional assessment cannot be restored by the proper officer on suo-motu basis.
Step 2- Notice form Proper Officer
The proper officer will issue a notice in Form GST ASMT- 02 for seeking of additional information or documents, Taxable Person is required to reply the notice under Form GST ASMT-03, any may appear in person before the said officer if he so desires.
Step 3- Provisionally Assessment Order
On due consideration of the reply so filed, and after providing a reasonable opportunity of being heard the proper officer must issue an assessment order in FORM GST ASMT-04, by allowing payment of tax on provisional basis, indicating the value or rate or both on the basis of which assessment is allowed on a provisional basis.
Step 4- Execution of Bound
The order so passed should also indicate the amount for which bond has to be executed in Form GST ASMT - 05 by the applicant. The security has to be furnished in the form of bank guarantee not exceeding 25% of the bond 'amount' which shall include IGST, CGST, SGST or UTGST and cess (if any) payable in respect of the transaction As per Form GST ASMT-5, if the bond and security is not provided within period specified in notice, the provisional assessment shall lapse.
Step 5- Finalization of provisional assessment-
The proper officer by issue of a notice in FORM GST ASMT-06, will call for information and records required for finalization of assessment. On conclusion of the due process of hearing, 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. The time period of 6 month may be extended by Additional Commissioner by further 6 months and by the commissioner for such period not exceeding 4 years.
Also the interest shall be charged if any amount is payable in final assessment order.
Step 6- Release of Security consequent to Finalization -
The applicant can file an application in FORM GST ASMT- 08 for release of security furnished. The proper officer ought to release the security furnished, after ensuring that the payment of the amount specified in the final assessment order and issue an order in FORM GST ASMT- 09. This order has to be issued within a period of 7 working days from the date of receipt of the application for release of security.
3. Scrutiny Assessment (Section 61, The CGST Act, 2017)
When a return furnished by a registered person is selected for scrutiny, the proper officer scrutinizes the same with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10 informing him of such discrepancy and seeking his explanation thereto. An explanation shall be furnished by the registered person, in reply to the aforesaid notice, within a maximum period of thirty days from the date of service of the notice or such further period as may be permitted by the proper officer.
The registered person may accept the discrepancy mentioned in the notice 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 the proper officer. Where the explanation furnished by the registered person or the information submitted is found to be acceptable, the proper officer shall inform the registered period in FORM GST ASMT-12. In the case, no satisfactory explanation is furnished, OR explanation furnished is not satisfactory, OR after accepting discrepancies, the registered person fails to take corrective measures, in his return for the month in which the discrepancy is accepted by him, the proper officer, may, take recourse to any of the following provisions:
• Initiate departmental audit as per section 65 of the Act; or
• Initiate Special Audit as per section 66
• Initiate inspection, search and seizure as per section 67 of the Act
• Issue show cause notice u/s 73 & 74 of the CGST Act.
4. Assessment of non-filers of returns (Section 62, The CGST Act, 2017)
Where a taxable person has not filled his monthly returns even after receiving the notice for filling of returns under section 46, the proper officer has power to assess the liability of the registered person under this section, at best of his knowledge, the assessment order under this section is issued in Form GST ASMT 13.
Where the registered person has filled his all the pending return within 30 days of assessment order, the said assessment order shall be deemed to be withdraw but the liability for the payment of interest under section 50(1) or the payment of late fee for filling of returns under section 47 shall be continue. Notice issued under section 46, is treated as show cause notice for assessment under this section.
5. Assessment of unregistered persons (Section 63, The CGST Act, 2017)
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 proper officer may proceed to assess the tax liability of such taxable person to the best of his judgement for the relevant tax periods and issue an assessment order within a period of 5 year from the due date of furnishing of annual return for the financial year to which tax not paid relates.
Provided that no such assessment order shall be passed without giving the person an opportunity of being heard.
The proper officer shall issue a notice in Form GST ASMT 14, which contains the grounds on which assessment is proposed, the registered person shall furnish his reply, within 15 days. After consideration of reply of registered person, if any, proper officer shall issue the assessment order in From GST ASMT 15.
6. Summary assessment in certain special cases (Section 64,The CGST Act, 2017)
The proper officer may, on any evidence showing a tax liability of a person coming to his notice, with the previous permission of Additional/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.
On an application made by the taxable person in Form GST ASMT 17, within thirty days from the date of receipt of order, or on his own motion, if the Additional or Joint Commissioner considers that such order is erroneous, proper officer may withdraw such order in Form GST ASMT 18 and follow the procedure laid down in Section 73 or section 74.