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Section 60 Provisional Assessment under GST: A Comprehensive Guide

CA Harshit Goyal , Last updated: 26 May 2023  
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INTRODUCTION

The Goods and Services Tax (GST) regime in India has brought about significant changes in the way taxation is conducted. One such provision under GST is Section 60, which allows a taxable person to make a provisional assessment of goods or services when they are unable to determine the value or rate of tax applicable. In this article, we will delve into the details of Section 60 and explore the procedures involved in the provisional assessment process.

1. Requesting Provisional Assessment

When a taxable person encounters difficulty in determining the value or rate of tax for goods or services, they can request the proper officer for payment of tax on a provisional basis. This request must be made in writing, accompanied by a clear explanation of the reasons behind the need for provisional assessment.

Section 60 Provisional Assessment under GST: A Comprehensive Guide

2. Furnishing the Application and Supporting Documents

To initiate the provisional assessment process, the taxable person must submit an application, along with relevant supporting documents, electronically. This application should be filed in FORM GST ASMT-01 through the common portal or a Facilitation Centre authorized by the Commissioner.

3. Additional Information and Documents

Upon receipt of the provisional assessment application, the proper officer may issue a notice in FORM GST ASMT-02. This notice will require the registered person to furnish additional information or documents supporting their request for provisional assessment.

4. Replying to the Notice

The applicant must file a reply to the notice received from the proper officer. This reply should be submitted in FORM GST ASMT-03. If desired, the applicant may also choose to appear in person before the officer to present their case.

 

5. Issuance of Provisional Assessment Order

Within a maximum period of 90 days, the proper officer will issue an order in FORM GST ASMT-04. This order will allow the payment of tax on a provisional basis and specify the value or rate or both, based on which the assessment is permitted provisionally.

6. Execution of Bond and Security

The provisional assessment process involves the execution of a bond and the provision of security. The proper officer will indicate the amount for which the bond needs to be executed and the value of security to be furnished. The security amount should not exceed twenty-five percent of the amount covered under the bond.

7. Utilizing Existing Bonds

If a bond has already been furnished to the proper officer under the State Goods and Services Tax Act or Integrated Goods and Services Tax Act, it will be deemed valid for the purposes of Section 60.

 

8. Finalization of Assessment

Upon completion of the provisional assessment, the proper officer will issue a notice in FORM GST ASMT-06. This notice will request the registered person to provide the necessary information and records for the finalization of assessment. Subsequently, a final assessment order will be issued in FORM GST ASMT-07, specifying the payable amount or the refundable amount, if applicable.

9. Timeframe for Final Assessment Order

The proper officer has a period of up to six months from the date of communication of the order issued under sub-section (1) to pass the final assessment order. However, this period may be extended by the Joint Commissioner or Additional Commissioner for a maximum of six months or by the Commissioner for a maximum of four years, provided sufficient cause is shown and the reasons are recorded in writing.

10. Interest on Tax Payable and Refund

In cases where tax payable under provisional assessment remains unpaid beyond the due date, the registered person will be liable to pay interest at a rate of 18% per annum. The interest accrues from the first day after the due date until the date of actual payment, irrespective of whether the payment is made before or after the issuance of the final assessment order. Conversely, if a refund is due

 following the final assessment order, the registered person will be entitled to receive interest at a rate of 6% per annum from the day immediately after 60 days from the date of receipt of the refund application until the date of refund.

11. Release of Security

After the issuance of the final assessment order, the applicant may apply for the release of the security furnished under sub-rule (4) by filing an application in FORM GST ASMT-08. Upon verifying that the specified amount has been paid, the proper officer will release the security and issue an order in FORM GST ASMT-09 within seven working days from the receipt of the application.

CONCLUSION

Section 60 of the GST Act provides a mechanism for provisional assessment when a taxable person faces difficulties in determining the value or rate of tax for goods or services. By following the prescribed procedures and fulfilling the necessary requirements, taxpayers can ensure compliance while addressing the challenges they encounter. Understanding the provisions outlined in Section 60 is crucial for businesses to navigate through the provisional assessment process effectively.

We hope that this article has been helpful in summarizing these important sections and encourage you to stay updated with the latest news and legal provisions in the GST in India by following our updates in the future.

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Published by

CA Harshit Goyal
(CA)
Category GST   Report

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