GST Advisory

Notice or Order from GST Department: Assessments under GST

There are various types of assessments under GST like self-assessment, provisional assessment, summary assessment and best judgement assessment. Assessment refers to determination of tax liability. An assessee under GST should self-assess his tax liability and furnish returns to declare tax payable etc.

Types of Assessments under GST

From Section 59 to 64, various types of assessments have been notified. Let’s discuss them one by one.

• Section 59: Self Assessment

Every registered person is required to assess tax liability himself and furnish a return.

• Section 60: Provisional Assessment

In case person is not able to determine value of supply or rate of tax, then payment of tax on provisional basis on implementation of bond on a request.

• Section 61: Scrutiny of Returns

To verify the accuracy of return, the proper officer shall examine return and seek explanations. In case where the explanation provided is adequate, there would be no further action. In case of no adequate explanation or no corrective measures, the proper officer may initiate audit/inspection.

• Section 62: Assessment of Non-filers of return

In case where the return is not furnished even after service of notice under section 46, the proper officer will evaluate the tax liability within a period of 5 years from the date mentioned under section 44 for furnishing annual return.

• Section 63: Assessment of unregistered person

The proper officer, to the best of his judgement, shall issue an assessment order within a 5 year period from the date mentioned under section 44 for furnishing of the annual return.

• Section 64: Summary Assessment in Special Cases

The proper officer can issue an assessment order imposing the liability of tax on a person based on any evidence showing tax liability.

Section 65 and 66: Audits

AUDIT BY TAX AUTHORITIES	SPECIAL AUDIT
The commissioner or the officer certified by him can undertake audit of any unregistered person	To be conducted at any stage of scrutiny, inquiry, investigation
Audit can be conducted at the place of business or in their office	If the officer not below the rank of assistant commissioner believes that the value hasn’t been declared correctly/the credit benefited is not within the normal limit
15 days notice should be provided	Can nominate a Chartered Accountant or a Cost Accountant
Time period- 3 days from the conduct of audit	Time period- 90 days
Extension: not exceeding 6 months	Extension: 90 days
The registered person would be informed regarding the findings, rights and obligations	Even if the accounts have been audited, audit will be conducted

Section 73 and 74

ACTION BY TAXPAYER	PENALTY AMOUNT PAYABLE
	Normal cases	Fraud cases
Tax amount with interest paid before notice is issued	No penalty and no notice	15% tax amount payable as penalty
Tax amount with interest paid within 30 days of notice issuance	No penalty. All proceedings deemed to be concluded	25% tax amount payable as penalty. All proceedings deemed to be concluded
Tax amount with interest paid within 30 days of order communication	10% tax amount or 10k rupees, whichever is higher	50% tax amount payable as penalty. All proceedings deemed to be concluded
Tax amount with interest paid after 30 days of order communication	10% tax amount or 10k rupees, whichever is higher	100% tax amount

Time limit for the issuance of notice and order: Assessments under GST

NATURE OF THE CASE	TIME FOR THE ISSUANCE OF NOTICE	TIME FOR ISSUANCE OF ORDER
Normal case	In 2 years and 9 months from the due date of Annual return filing for the Financial Year (F.Y) to which the demand pertains or from the date of erroneous refund	In 3 years from the due date of Annual return filing for the Financial Year (F.Y) to which the demand pertains or from the date of erroneous refund
Fraud cases	In four years and six months from the due date of Annual return filing for the Financial Year (F.Y) to which the demand pertains or from the date of erroneous refund	In 5 years from the due date of filing Annual return for the Financial Year (F.Y) to which the demand pertains or from the date of erroneous refund
Amount collected as tax but not paid	No time limit	Within a year from the date of issuance of notice
Non-payment of self assessed tax	No issuance of SCN	The recovery proceedings can start directly

Conclusion

Assessments under GST have been initiated by the GST department^[1] therefore, the assessee should understand the assessment nature and should be ready to provide response. The Assessee is advised to maintain proper documents of all aspects and be prepared for scrutiny from the department.

Read our article:PIL filed for Constitution of GST Appellate Tribunal