India has a Goods and Services Tax system based on self-compliance and self-assessment. Nevertheless, to determine the correct amount of tax to pay and avoid revenue loss, the GST law provides a systematic assessment method. The GST assessment procedure enables tax authorities to verify returns, calculate the amount of tax payable, and take action when returns are not submitted or are found to be incorrect. Knowing the assessment structure is vital to staying in business and avoiding fines, interest charges, and legal action.
Brief Overview of Assessment under the GST Act
Chapter XII of the Central Goods and Services Tax Act, 2017, which addresses the provisions of assessment, is mainly applicable in Chapter 60 to Section 64. These provisions give tax authorities the power to determine tax liability under various conditions, including self-assessment, provisional assessment, non-filing of returns, and special cases requiring expert determination. The process of the assessment is also aided by the CGST Rules, 2017, which specify procedures, timelines and forms.
Self-Assessment under GST
a) Meaning and Legal Provision
The GST system relies on self-assessment, which is regulated in Section 59 of the CGST Act, 2017. According to this provision, it is the duty of each registered person to determine his or her tax liability and file GST returns accordingly. The tax to be paid is reported in returns such as GSTR-3B and is paid on a self-assessed basis.
b) The significance of Self-Assessment
Self-assessment guarantees simplicity in compliance, less intervention of the department and responsibility put on the taxpayers to calculate the tax liability correctly. Any underpayment or wrongful claim of input tax credit can be subject to scrutiny or assessment in future.
Temporary Evaluation within GST
- Concept and Applicability: Section 60 of the CGST Act, 2017, deals with provisional assessment. It is used when a taxpayer cannot establish the value of goods or services or the tax rate to be used. The taxpayer might seek the authorisation of the relevant officer to pay tax on a provisional basis in such situations.
- Procedure and Forms: The taxpayer has to make an application in the form of GST ASMT-01. The proper officer can make a statement in FORM GST ASMT-02, which gives a provisional assessment and states the rate or value. There might be a requirement for a bond and security. A final assessment order is granted in FORM GST ASMT-07, and the difference in tax payable or refunds payable is the interest and paying tax as well.
Scrutiny of Returns
- Legal Basis: The inspection of returns is regulated by Section 61 of the CGST Act, 2017 and Rule 99 of the CGST Rules, 2017. It entails an initial review of returns that are submitted by the taxpayer to identify inconsistencies.
- Process and Forms: Where discrepancies are identified, the appropriate officer gives a notice in FORM GST ASMT-10, in which an explanation should be provided. The taxpayer has to respond in FORM GST ASMT-11. In case of a satisfactory explanation, the officer provides an intimation in FORM GST ASMT-12, and the scrutiny is over.
Best Judgment Assessment in Case of Non-Filers
Evaluation of Non-Filing of Returns
In Section 62 of the CGST Act, 2017, in the event that a registered person does not file returns despite being given a notice in accordance with Section 46, the relevant proper officer may undertake best judgment assessment.
Key Features
They are evaluated using the available information and records. A request is given in FORM GST ASMT-13. Where the taxpayer submits a valid return within 30 days of the assessment order, the order is considered withdrawn, and there should be payment of interest and late fees.
Best Judgment Evaluation of Unregistered Persons
Legal Provision
The CGST Act, 2017, section 63 addresses the measurement of a person who is liable to register but is not so registered, or whose registration has been revoked.
Procedure
The competent officer determines the tax liability in his or her best judgment using the material at hand. In FORM GST ASMT-15, an opportunity to be heard is given, following which an order is passed.
Summary Assessment of Special Cases
Meaning and Scope
The summary assessment is done according to Section 64 of the CGST Act, 2017 and is applied to situations when the threat to revenue is obvious and urgent measures must be taken. This can be done through an assessment that has been initiated in advance with a higher authority.
Procedure and Forms
The order of the summary assessment is issued by the proper officer in FORM GST ASMT-16. The withdrawal of the order may be sought by the taxable person or any other person as an order in FORM GST ASMT-17. The order can be rescinded with FORM GST ASMT-18 in case it is justified.
Role of CGST Rules in Assessment Procedure
The CGST Rules, 2017, are instrumental in the realisation of the assessment provisions. They establish deadlines, documentation, process protection, notice and order forms. The adherence to regulations makes the assessment proceedings transparent, fair, and consistent.
Having a clear overview of GST assessment processes enables businesses to respond to notices in a timely manner and maintain proper records that do not lead to unnecessary litigation. Compliance helps prevent fines, interest, and enforcement measures.
Conclusion
The GST assessment process is holistic, aimed at achieving equilibrium between self-compliance and regulation. The GST law has made tax administration more accurate and accountable through various types of assessment, including self-assessment, provisional assessment, scrutiny, and best judgment assessment. For businesses, it is necessary to understand the provisions of the relevant GST Act, the rules, and the forms used, so they can stay compliant and manage tax risks.
