Assessment means determining the tax liability of a person. This article discusses the various types of assessments under the GST regime in detail.
As per section 2(11) of GST act, Assessment means the computation of Tax liability under this act and includes
- Self-assessment (Section 59),
- Re-assessment (Section 61),
- Provisional assessment (Section 60),
- Summary assessment (Section 64)
- Best judgment assessment of non-filer (Section 62) and
- Best judgment assessment of non Registered person (Section 63)
In GST regime, Assessment is mainly focused on Self-assessment by the taxpayers themselves, where every taxpayer furnishes a return as required u/s 39 of GST act by self -assessing the taxes payable by him.
As per the provisions of section 59 of the GST Act, every registered person is required to self-assess the taxes payable under this Act and furnish a return for each tax period as specified under section 39.
As per the provisions of section 60 of the GST Act, the Provisional assessment shall be conducted on the request of the taxpayer in the following Situation
- where the taxpayer is unable to determine the value of Goods or Services or both
- where the taxpayer is unable to determine the applicable rate of tax.
Procedure for Provisional Assessment
- The Taxpayer has to request the proper officer in writing for provisional assessments.
- Within the period of 90 days from the date of receipt of such request, the proper officer shall pass an order allowing the taxpayer to pay tax on a provisional basis at such rate or on such value as described by him.
- The taxpayer making the payment on a provisional basis has to issue a bond with security promising to pay the difference amount between provisionally assessed tax and final assessed tax.
- Within the period of six months from the date of order of provisional payment, the proper officer shall pass the final assessment order and the provisional assessment shall be followed by final assessments.
Time limit to pass the final assessment order
The Final assessment order shall be passed within the period of 6 months from the date of provisional assessment. Such aforesaid period shall be extended by the Joint Commissioner or Additional Commissioner for a further period not exceeding 6 months and by the Commissioner for such further period not exceeding 4 years.
Interest on Tax payable and Refunds.
The taxpayer is liable to pay interest on any tax payable on the supply of goods or services or both under provisional assessment which was not paid within the due date specified u/s 39(7).
Interest shall be applicable at the rate specified u/s 50(1) (i.e.,18%) from the day after the due date of payment of tax in respect of the said supply of goods or services or both till actual payment date, whether such amount is paid before or after the issuance of order for final assessment.
The Taxpayer is entitled to Refund with interest if in case the tax computed as per the final assessment is less than provisional assessment.
if the refund is not paid to the taxpayer within 60 days from the date of application of refund then the taxpayer shall also be eligible for the interest on refund under section 56 @ 6% per annum from the 61st day to the actual date of payment.
Scrutiny of Returns
As per the provisions of section 61 of the GST act, Scrutiny Assessment shall be conducted by the proper officer in order to verify the correctness of the return and inform him of the discrepancies noticed (if any) and seek his explanation for the same.
In case of satisfactory explanation
No further action shall be taken in this regard if the explanation if found acceptable.
In the case of No satisfactory explanation
The Proper Officer may initiate the appropriate action if the taxpayer is failed to furnish the satisfactory explanation within the period of 30 days or failed to rectify the discrepancies.
The Action taken by the proper officer shall include
- To Conduct a tax audit u/s 65.
- To Inspect and search the places of the taxpayer’s business u/s 67
- To Start a special audit u/s 66
- To Send notices for outstanding demand or shortfall of when there is no willful intention of doing fraud u/s 73
- To Send notices for outstanding demand or shortfall when there is the willful intention of fraud u/s 74.
Best Judgement Assessment
Best Judgement assessment is conducted by the proper officer to the best of his judgement based on his reasoning and the available information.
Best Judgement Assessment shall be conducted in the following scenarios:
- Assessment of non-filers of returns
- Assessment of unregistered persons
Assessment of Non-filers of returns
As per the provisions of section 62 of the GST Act, if in case the taxpayer is failed to furnish the return u/s 39 or u/s 45 even after serving the notice u/s 46, the Proper Officer is required to conduct an assessment.
The proper officer shall assess the tax liability of the taxpayer to the best of his judgement taking into consideration all the relevant materials that are available and issue an assessment order within a period of five years from the date of furnishing of annual return for the financial year for which the tax has not been paid.
On filing the valid return within the period of thirty days of the service of the assessment order, the assessment order shall be deemed to be withdrawn. but the taxpayer is liable to pay late fee u/s 47 and/or interest u/s 50(1).
Assessment of unregistered persons
As per the provisions of section 63 of the GST Act, if in case the taxpayer is failed to obtain a GST registration even though he is liable to do so or whose registration has been cancelled under section 29(2) even though he is liable to pay tax, the proper officer shall proceed to assess the tax liability for the relevant tax periods of such taxable person to the best of his judgement and shall issue an assessment order within a period of five years from the date specified u/s 44 for furnishing of the annual return for the financial year for which the tax has not been paid.
As per the provisions of section 64 of the GST Act, the proper officer shall conduct the summary assessment on any evidence showing a tax liability of a person coming to his notice, after obtaining the prior permission from the additional commissioner or joint commissioner.
The proper officer shall proceed to assess the tax liability of a person to protect the interest of revenue and can also issue an assessment order if he has proof that the delay in assessment can adversely affect the interest of revenue.