Understanding and Explanation of GST Assessment

GST Assessment means when the liable taxes are determined under the GST Laws and provisions either by the taxpayer or by GST Authorities. There are different types of assessment under Goods and Services Tax that have been well defined in the statute. Below in the article we have discussed various types of GST Assessment.

GST Assessment

Types of GST Assessment:

Here are seven types of GST Assessment as per the CGST Act, 2017. These are as follows-

  • Self-assessment
  • Provisional assessment
  • Scrutiny assessment
  • Assessment of non-filers of returns: Best judgment assessment
  • Assessment of unregistered persons
  • Summary assessment

In the above stated types of GST Assessment only self-assessment is performed by the taxpayer or the registered person himself and all other assessments are carried forward by the GST or tax authorities.

  • Self-Assessment:

Every taxpayer or person registered under GST is liable to assess themselves to compute the payable taxes and then furnish the necessary GST Return for a particular time or tax period. This type of assessment is called self-assessment as it is a type of GST Assessment performed by the taxpayer himself.

  • Provisional Assessment:

In certain situation where assesses or the taxpayer is unable to compute the actual tax amount or value or rate for furnishing the returns, they can request in writing to the GST officials for conducting a provisional assessment. This type of GST Assessment is demanded when the taxpayer is

Unable to determine tax value due to the difficulty in:

  • Calculation of the transactional value
  • Whether to include or exclude certain receipts

Unable to determine the tax rate due to difficulties in:

  • Classification of items in goods or services
  • Whether a provided notification is applicable or not
  • Scrutiny of Returns:

For the purpose of verification of correctness of a GST Return filed by the taxpayer or person having Registration under GST, the GST Officer can scrutinize the documents at any given point of time. This is called Scrutiny Assessment. However, this type of GST Assessment is a pre-adjudication process that is non-compulsory. This means that scrutiny assessment is not mandatory to be conducted by the officer as it is not a judicial proceeding or a legal process. This implies that no order can be passed by the GST Officer while undertaking this type of GST Assessment. But, the officer as per the CGST Act, 2017 has been given the power to ask for explanations or to submit required evidences in case he notices any mistake or discrepancy. After receiving an explanation from the taxpayer two cases are likely to happen which are as follows-

  1. When the provided explanation is satisfactory:

In case the tax officer is satisfied with the explanation provided by the taxpayer, then the same is to be intimated or informed assesses by the officials and no further action is taken against the taxpayer.

  1. When the provided explanation is not satisfactory:

In case the explanation provided by the taxpayer is not satisfactory in any manner because of one of the reasons-

  • Where the taxable person has not provided an ample explanation that is satisfactory within 30 days of receiving an order for the same under the GST Assessment.
  • Where the taxable, within the reasonable time limit does not rectify all the mistakes and discrepancies.

In that case the proper officer can take the following action against the taxpayer-

  • He may conduct a GST Audit of the assesses under Section 65 of the CGST Act, 2017
  • He may start the procedure of Special Audit as prescribed under Section 60
  • He may likely start the provisions of demand and recovery
  • He is likely to conduct an inspection and search at the taxpayers place of business or registered office
  • GST Assessment for non-filers of returns: Best Judgment Assessment

The taxpayer after receiving a notice under Section 46 for not filing the returns on time is likely to have a GST Assessment conducted by the GST Officer. Such an assessment is conducted as per the provisions of the Section 62. The officer assesses the tax liability of the person by taking into account all the relevant documents within his reach. The officer in such cases investigates the matter. A best judgment assessment by the assessing officer or GST Officer is undertaken here and an assessment order is passed by the officer with the best of his knowledge and skills.

  • GST Assessment for unregistered persons: Best Judgment

It is slightly un-relatable but the GST Office does conduct GST Assessment for the unregistered persons as well. But the condition is that the taxable person must not have obtained the GST Registration because of delay or some other reason or their registration have been cancelled under Section 29(2) of the CGST Act, 2017 on account of various reasons. In such cases the GST Officer is likely to make an assessment based on his best of the knowledge taking in account all the reasons and relevant evidences.

  • Summary assessment:

On the basis of all the evidences that show the tax liability of the taxpayer is not fulfilled as per the laws, in that case the GST Officer can conduct a GST Assessment called as summary assessment. This type of assessment is performed for computing the actual and true tax liabilities of the registered person. With the prior permission of the Joint Commissioner or the Additional Commissioner of GST, the tax officer may pass an assessment order based on solid reasons and grounds.

Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.