The term "Assessment" means determination of tax liability under this Act.
Determination of Tax Liability can either be done by the Taxpayer himself or by the Department as the case may be.
We will discuss in this article, various kind of Assessments as provided in the Law. We will also discuss in case, Taxpayer does not agree with the Assessment Orders passed by the Department, what recourse is available to him.
1. Self-Assessment (Section 59):
As the name suggests, Self-Assessment is one which is carried out by the Taxpayer himself. GST more and large is based on the philosophy of self-check system where prime responsibility of determination of correct tax liability lies with the Taxpayer. Accordingly, Law Provides in Section 59 that:
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.
Accordingly, every Registered Person needs to ascertain his tax liability on his own and discharge the same for each tax period.
For Example, a Normal Tax Payer needs to determine and Pay Tax in GSTR-3B (monthly/quarterly as the case may be).
2. Provisional Assessment (Section-60 & Rule 98)
Many of times, it may happens that Taxpayer is unable to do self-assessment properly for the reasons that he is not sure about correct
Value of Goods or Services (many of times confusion happens regarding inclusion of certain receipts in value or not)
Rate of GST applicable (classification issue i.e. correct HSN/SAC for goods or services as the case may be).
Accordingly, in this case, Taxpayer has been given an option where he can approach the Department (Proper Officer) for determination of Value and Rate of GST as the case may be by filing Form GST-ASMT-01. Proper Officer can seek additional information from the Registered Person in GST-ASMT-02 which Taxpayer need to submit in GST-ASMT 03.
Further, Taxpayer may be allowed to pay GST on provisional basis in accordance with Provisional Assessment Order (GST-ASMT-04) passed by the Proper Office with in period not later than 90 days from the date of receipt of request.
Further, in this case, Taxpayer needs to execute a Bond in GST-ASMT-05 binding him for payment of the difference between the amount of tax as may be finally assessed and the amount of tax provisionally assessed. Further, Bank Security against the Bond Amount (not exceeding 25% of Bond Amount) can also be sought by the Proper Officer.
The proper officer shall, within a period not exceeding six months from the date of the communication of the Provisional Assessment Order, pass the final assessment order in GST-ASMT-07 after taking into account such information as may be required for finalizing the assessment. (The same is extendable for Six months by JC/ADC and up to Four Years by the Commissioner).
In case it is ascertained in Final Assessment Order that Tax is short paid, Taxpayer needs to pay Tax along with interest thereon as calculated under Section 50. (No Penalty is payable). After Payment of Tax along with interest, Taxpayer can apply in GST-ASMT-08 for release of security which Proper Officer will release within seven days after ensuring the payment of Tax.
Here, one point is to be noted that Proper Officer is not required to issue SCN for the recovery of Tax Short Paid as Final Assessment order in itself is like Adjudication order which is issued after considering the submissions of the Taxpayer.
In case it is ascertained in Final Assessment Order that Tax is excess paid, Taxpayer will get the refund of Tax along with interest thereon as calculated under Section 56.
In case, Taxpayer does not agree with the Final Assessment Order, in our interpretation of Law, he can file appeal with the Appellate Authority. (For details, regarding Appellate Authority, please read at: https://www.fabgyan.com/post/everything-to-know-about-first-appellate-authority-in-gst.
3. Scrutiny of returns (Section 61 & Rule 99)
The proper officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner as may be prescribed and seek his explanation thereto.
In this regards, detailed Instruction dated 26-05-2023 has been issued by the Department to make the process of scrutiny of return Faceless as far as possible.
Key Points of the Instructions
1. Details of GSTNs along with their respective Risk Parameters and likely Revenue Implication will be shared on ACES-GST Application to the respective Proper Officers.
2. ASMT-10 (notice of Discrepancy), ASMT-11 (Reply of Assessee) and ASMT-12 (Acceptance of Reply of Assessee) or SCN will be issued through portal only. No manual proceedings.
3. Normally no additional documents from Assessee before issuance of ASMT-10 should be sought and ASMT-10 should be issued based on available information with the Department.
4. Proper officer should consider latest data as provided by the Assessee while finalising the proceedings. (not necessary the same as was available at the time of issuance of ASMT-10.
5. Discrepancies communicated in ASMT-10 should be specific and as far as possible quantified. They should not be General and vague.
6. Assessee needs to deposit the Tax along with interest and penalty if discrepancies are accepted or submit explanation in ASMT-11 as the case may be within 30 days of issuance of ASMT-10.
7. In case submission of Assessee is acceptable to Proper Officer, he will conclude the proceedings vide issuance of ASMT-12. In case submissions are not acceptable, he will proceed with Show Cause Notice under 73/74.
6. In case Proper Officer feels further investigation is required, He may refer the matter for Audit/investigation.
8. Various Time lines have also been prescribed to complete the process.
4. Best Judgement Assessment of non-filers of returns (Section 62 & Rule 100)
In case Taxpayer fails to submit return even after notice from the department
Under section 39 (like GSTR-3B) or
Section 45 (Final Return in case of cancellation of Registration) as the case may be
The 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 (GST-ASMT-13 & summary of order in DRC-07) within a period of five years from the date specified under section 44 for furnishing of the annual return (like GSTR-9) for the financial year to which the tax not paid relates.
This section has overriding effect over Section 73/74 i.e. even without following procedure & timelines of Section 73/74, Proper officer can determine the tax liability.
Where the registered person furnishes a valid return within thirty 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 under sub-section (1) of section 50 or for payment of late fee under section 47 for filing late returns shall continue.
In case, Taxpayer does not agree with the Final Assessment Order, in our interpretation of Law, he can file appeal with the Appellate Authority. (For details, regarding Appellate Authority, please read at: https://www.fabgyan.com/post/everything-to-know-about-first-appellate-authority-in-gst.
5. Assessment of unregistered persons (Section 63 & Rule 100)
Where a taxable person
fails to obtain registration even though he was liable to take Registration or
Whose registration has been cancelled under sub-section (2) of section 29 (like in case of Non-filers) but who was liable to pay tax,
The Proper Officer can assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods and issue an assessment order within a period of five 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.
For this, the proper officer shall issue a notice in FORM GST ASMT-14 containing the grounds on which the assessment is proposed to be made on best judgment basis and shall also serve a summary thereof electronically in FORM GST DRC-01, and after allowing a time of fifteen days to such person to furnish his reply, if any, pass an order in FORM GST ASMT-15 and summary thereof shall be uploaded electronically in FORM GST DRC-07.
This section has overriding effect over Section 73/74 i.e. even without following procedure & timelines of Section 73/74, Proper officer can determine the tax liability.
In case, Taxpayer does not agree with the Final Assessment Order, in our interpretation of Law, he can file appeal with the Appellate Authority. (For details, regarding Appellate Authority, please read at: https://www.fabgyan.com/post/everything-to-know-about-first-appellate-authority-in-gst.
6. Summary assessment in certain special cases (Section 64 & Rule 100)
The 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 GST-ASMT-16 & Summary in DRC-07), if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue:
Further, where the 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.
Furthermore, the taxable person within thirty days from the date of receipt of order passed may apply for withdrawal of the Order in form GST-ASMT-17.
Proper officer can either reject the application or withdraw the order if JC/ADC feels that such order is erroneous, in Form ASMT-18. In case, order is withdrawn, Proper officer will follow the procedure of Section 73/74.
Such Order can also be withdrawn on his own by the Department, if the Additional Commissioner or Joint Commissioner considers that such order is erroneous. In this case also, Proper officer will follow the procedure of Section 73/74.
In case, Taxpayer does not agree with the Final Assessment Order/Rejection of his request for withdrawal of order, in our interpretation of Law, he can file appeal with the Appellate Authority. (For details, regarding Appellate Authority, please read at: https://www.fabgyan.com/post/everything-to-know-about-first-appellate-authority-in-gst.
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Disclaimer: We have taken due care to the best of our knowledge while explaining the provisions surrounding the issue purely for informational/academic purpose. It should not be considered as professional advice or consultancy to be relied upon. While due care has been taken by Fab Gyan in preparing this article, certain mistakes and omissions may creep in. The Fab Gyan or its Author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.
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