Chapter 17: Assessment Procedures

Statutory Basis: Section 59 of the CGST Act, 2017.

GST operates primarily on the principle of self-assessment, wherein every registered person is required to assess their own tax liability and file returns accordingly.

Key Features:

Taxpayer determines output tax liability and eligible ITC on their own.

Basis for tax payment and return filing under GSTR-3B.

Tax authorities may scrutinize, audit, or verify the accuracy of such self-assessment subsequently.

Responsibilities under Self-Assessment:

Maintain proper books of accounts and records.

File periodic returns (GSTR-1, GSTR-3B, GSTR-9).

Pay self-assessed tax within due dates.

Objective: Encourages voluntary compliance and minimizes direct administrative intervention.

Statutory Basis: Section 60 of the CGST Act, 2017; Rule 98 of the CGST Rules.

When a taxpayer is unable to determine the value or rate of tax applicable to a supply, they may seek permission from the proper officer to pay tax on a provisional basis.

Situations Warranting Provisional Assessment:

Doubt regarding tax rate (e.g., classification dispute).

Uncertainty in transaction value (e.g., related party transactions, price variation clauses).

Procedure:

1️⃣ File Form GST ASMT-01 seeking permission for provisional assessment. 2️⃣ Proper officer issues notice and allows provisional assessment via Form GST ASMT-04. 3️⃣ Taxpayer furnishes bond with security (not exceeding 25% of tax) as per Rule 98(2). 4️⃣ Final assessment to be made within 6 months (extendable up to 4 years).

Outcome:

Any excess tax paid → refundable with interest under Section 56.

Any shortfall → payable with interest under Section 50.

Statutory Basis: Section 61 of the CGST Act, 2017; Rule 99 of the CGST Rules.

The proper officer may scrutinize the returns to verify correctness of tax paid, ITC claimed, and other particulars.

Procedure:

1️⃣ Officer examines returns and related documents. 2️⃣ If discrepancies are found, notice issued in Form GST ASMT-10. 3️⃣ Taxpayer must respond within 30 days (or extended period) using Form GST ASMT-11. 4️⃣ If explanation found satisfactory → process closed via Form GST ASMT-12. 5️⃣ If not satisfactory → proceedings may be initiated under Section 73 or 74.

Examples of Common Discrepancies:

ITC mismatch between GSTR-3B and GSTR-2B.

Underreporting of outward supplies.

Wrong classification or underpayment of tax.

Purpose: Acts as an early-warning and correction mechanism before initiating adjudication.

Statutory Basis: Section 62 of the CGST Act, 2017.

Applied when a registered person fails to file returns despite notice.

Procedure:

Officer issues notice under Section 46 directing filing of returns within 15 days. If taxpayer fails to comply → officer may assess tax liability to the best of his judgment based on available data. Assessment order passed in Form GST ASMT-13. If taxpayer files the valid return within 30 days of assessment order → such order is deemed withdrawn, but tax, interest, and late fees remain payable.

Example: A taxpayer fails to file GSTR-3B for six months despite reminders. → Officer issues notice u/s 46 → No compliance → Best judgment order passed based on GSTR-1 and e-way bill data.

Objective: To compel return defaulters to comply and ensure revenue protection.

Statutory Basis: Section 64 of the CGST Act, 2017.

Summary assessment enables immediate tax determination where delay may adversely affect revenue interests.

Conditions:

Proper officer must have evidence of liability.

Requires prior approval of Additional/Joint Commissioner.

Procedure:

Assessment order passed in Form GST ASMT-16.

Copy furnished to the concerned person.

If taxpayer believes assessment is erroneous → may apply for withdrawal in Form GST ASMT-17 within 30 days.

The authority may withdraw the order if deemed fit and proceed under normal assessment (Sec. 73/74).

Use Cases:

Goods detained during transit with clear tax evasion evidence.

Situations demanding urgent recovery action.