Types of Assessment Under GST

ASSESSMENT

To enhance the positive economic environment government consolidated all most all indirect taxes in to one tax called Goods & Services Tax (GST). It is the major step of Indian government in the global scenario.

Today I am sharing an article on Assessment under GST. It means determination of tax liability under GST law. There are various types of assessment under GST mentioned below:-

Types of Assessment under GST

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Section 59-64 of the Central Goods and Services Tax (CGST) Act explain the concept of assessment.

Self-assessment

Provisional assessment

Scrutiny assessment

Assessment of non-filers of returns         Best Judgment assessment

Assessment of unregistered persons

Summary assessment

It is to be noted that only self-assessment is done by the taxpayer himself. All the other assessments are by tax authorities.

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Self-Assessment

As per Section 59 of CGST Act. 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. Taxpayer is required to pay tax on the basis of self-assessment done by himself.

Provisional Assessment

If a taxpayer is unable to determine the value of goods or services or rate of tax, he may request the proper officer for provisional assessment. The difficulty in classification of goods/ services is the reason unable to determine the rate of tax under GST.

Steps of Provisional Assessment

Taxpayer requests to proper officer for provisional assessments in writing

The proper officer after review the application pass the order, within 90 days from the date of request, allowing payment of tax on provisional basis at a rate or on a value specified by him.

 

The taxable person has to issue a bond with a security promising to pay the difference between provisionally assessed tax and final assessed tax.

Proper officer will pass the final assessment within a period not exceeding six months from the date of communication or order of provisional payment. The Commissioner can extend it for further 4 years as he deem fit.

Interest on Additional Tax Payable and Refunds

After final assessment The tax payer is held liable to pay more tax than tax paid at the time of provisional assessment and interest (Maximum 18%)on any tax payable under provisional assessment which was not paid within the due date.

Interest period will be calculated from the actual due date of tax.

In case of Refund Rate of interest will be maximum 6%.

Scrutiny Assessment

To verify the correctness of return and find the discrepancies in return and information given by taxpayer, proper officer can scrutinize the return. The officer will ask for explanations on discrepancies noticed. It is the duty of taxpayer to give the explanation to proper officer.

If the explanation found satisfactory then the taxable person will be informed and no further action will be taken.

If the explanation found not satisfactory then proper officer will initiate appropriate action like conduct audit, special audit, inspect and search the place of business of taxpayer or start demand and recovery provisions.

 

Assessment of non-filers of returns- Best Judgment Assessment

When a registered person fails to furnish the required returns, even after service of notice under Section 46 an assessment would be conduced by the GST Officer. In such cases, the GST officer would proceed to assess the tax liability of the taxpayer 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 within a period of five years from the date for furnishing of the annual return for the financial year to which the tax not paid relates.

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) and/or liable to pay late fee under Section 47.

Assessment of unregistered persons- Best Judgment Assessment

When a taxable person fails to obtain GST registration even though liable to do so or whose registration has been cancelled under section 29 (2) but who was liable to pay tax, the Proper officer can proceed to 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.

Summary Assessment

A Proper Office can on any evidence showing a tax liability of a person coming to his notice, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue. In order to undertake assessment under section 64, the proper officer is required to obtain previous permission of additional commissioner or joint commissioner. Such an assessment is called summary assessment