GST Assessment means determination of tax liability under GST law. It includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment. Normally, persons having GST registration file GST returns and pay GST every month based on self-assessment of GST liability. However, the Government at all times has the rights to re-assess or perform an assessment by itself and determine if there is a short payment of GST.
Types of Assessment under GST
The taxable person is required to pay tax on the basis of self-assessment done by him. Hence, all GST return filings are based on self-assessment by the taxpayer. Every registered person shall self assess the taxes payable and furnish a return. This means GST continues to promote self-assessment just like the Excise, VAT and Service Tax under current tax regime.
Provisional Assessment (sec.60)
Provisional assessment can be conducted for a taxable person when the taxpayer is unable to determine the value of goods or service or both or determine the rate of tax applicable thereto. In case the taxable person is unable to determine the tax liability due to value or rate of tax, he may file application in Form GST ASMT-01 along with documents in support of paying the tax on provisional basis.
Procedure for Provisional Assessment:-
- Step 1: The taxable person has to give, the concerned GST officer, a request for provisional assessment in writing.
- Step 2: The GST officer on reviewing the application, will pass an order, within a period not later than ninety days from the date of receipt of the request, allowing payment of tax on provisional basis or at a GST rate or on such value as specified by him.
- Step 3: The taxable person, who is making payment on provisional basis, has to issue a bond with a security promising to pay the difference between provisionally assessed tax and final assessed tax.
- Step 4: The GST officer will pass final assessment, with a period not exceeding six months from the date of communication of order of provisional payment.
Interest Payable for Provisional Assessment
Taxable person is held liable to pay more tax than tax paid at the time provisional assessment, in such case, the taxable person will be liable to pay interest on such tax payment. Interest would be calculated from the actual due date of tax till the date of actual payment of tax.
Extension of Period:-
By Joint Commissioner or Additional Commissioner- further 6 months.
By Commissioner- further 4 years.
Reasons of extension are as follows:-
- In case of any difference, person shall be liable to pay interest.
- In case of refund, person is entitled to get the refund with interest.
- Applicant may file an application in Form No. GST ASMT-08 for release of security.
- Proper Officer shall release the security and issue order in Form GST ASMT-09 within seven working days from the receipt of application.
Scrutiny Assessment (sec.61)
The proper officer can scrutinize the return to verify its correctness. It is a non-compulsory assessment pre-adjudication process. In simple words, it is not mandatory for the officer to scrutinize return. Scrutiny of returns is not a legal or judicial proceeding i.e., no order can be passed.
After receiving notice there are again two possibilities:-
- Assessee accepts the discrepancy – pay the tax with interest and penalty.
- Assessee does not accept the discrepancy:-
· There are two possible actions by assessee:-
- Explanation filed: In case explanation is accepted, no further action.
- In case explanation not accepted, following action may be taken again the assessee:-
Audit by tax authorities
Audit by chartered accountants/ cost accountants or person nominated by the commissioner.
Best Judgment Assessment – non filing of returns (sec.62)
Proper officer may pass the best judgment order in Form No. GST ASMT-13 on the basis of information he has or collected within 5 years from the due date of filing of annual return. Or in case person did not file the following returns then proper officer may pass the best judgments:-
- Return of Outward supplies
- Return of Inward supplies
- Monthly Return
- TDS Return
- TCS returns
- Return by Nonresident person
- Return by Input service provider
- Final Return under section 45
- Return to comply with the notice under section 46.
On receipt of the said assessment order, if the registered person furnishes a valid return within a period of 30 days from the date of issuance of assessment order, then in such case, the assessment order would deemed to have withdrawn. However, the registered person will be liable to pay interest under Section 50 (1) or liable to pay late fee under Section 47.
Best Judgment Assessment – unregistered person (sec.63)
Officer may pass the best judgment assessment within five years if a person who is liable to obtain the registration fails to obtain the registration or the person whose registration has been cancelled by officer but who is liable to pay tax. An opportunity of being heard shall be given for 15 days before passing the order.
Summary Assessment (sec.64)
Summary Assessment is done when the assessing officer comes across sufficient grounds to believe any delay in showing a tax liability can harm the interest of the revenue. To protect the interest of the revenue, he can pass the summary assessment with the prior permission of the additional/joint commissioner.
Following are the consequences and penalties of non-compliance under GST:-
- For tax evasion/ short deduction: 100% penalty subject to a minimum of Rs. 10,000/-
- Any person would be liable to pay a penalty extending up to Rs. 25,000 in following cases:-
- who Acquires/ receives any goods/ services with knowledge that it is a violation of GST law
- Helps a person to commit fraud under GST
- Fails to issue invoice in accordance with GST rules
- Fails to account/ vouch any invoice in the books of account
- Absents himself from summons by tax authority
- For tax amount involved 100 to 200 lakhs, a jail term of 1 year along with the fine.
- For tax amount involved 200 to 500 lakhs, a jail term of 3 years along with the fine.
- For non-payment and short payment of tax, a penalty of 10% of tax amount due subject to a minimum of Rs. 10,000/-.