What is Provisional Assessment?

Section 60: Provisional Assessment

As per Section 60 of the Central Goods and Services Tax (CGST) Act, 2017 Provisional assessment is a type of GST Assessment that can be conducted by the GST Officer on the written request of the taxable person in case they are unable to determine the applicable tax rates or the value of the goods or services or both for accurate computation to be filed in GST Return for a particular tax period. The officer conducting the provisional assessment can help the taxpayer in the correct calculation of the taxes.

GST Provisional Assessment

Situations where Provisional Assessment is required:

Provisional Assessment is a method to determine the correct and accurate tax liability that couldn’t be calculated at the time of the made supplies. Two major determinants that help in calculating the taxes of a taxable person are namely; the value of supply and rate of tax. But at times there can be situations where even these determinants can be unreliable due to the outcome of the process which requires time and deliberation. The taxpayer is unable to compute taxes when he is unable to determine the following-

  1. Value of the supplied goods or services or both
  2. Applicable tax rates on the goods and services to be supplied

The taxpayers have been given the option to file an application form for requesting the GST Officials to conduct the Provisional Assessment under GST Assessment by stating the reasons for making provisional tax payments. Such an application must be supported by the documents and attachments. The taxpayer can file the assessment application through the online common portal of the GST, either themselves or through a facilitation center that has been notified by the Commissioner under GST. 

Procedure for Provisional Assessment:

The following procedure is followed for conducting the Provisional Assessment for the taxpayer or assesses-

Step 1: The taxpayer is required to file a request application for provisional assessment in a written format with the concerned GST Officer.

Step 2: After reviewing the application, the GST Officer within 90 days from the date of receiving such an application will pass an order stating that the taxpayer can make a tax payment on a provisional basis or at a tax or GST Rate specified by him on such value.

Step 3: The taxpayer while making the tax payments on a provisional basis has to issue a bond with a security for promising to pay the tax authorities, the difference between the taxes assessed provisionally and the taxes assessed finally.

Step 4: Once the provisional assessment is concluded, the GST Officer will pass the final assessment within the period not exceeding six months from the date of intimation of the provisional payment order to the taxpayer or assesses.

GST Refund under Provisional Assessment:

The GST Refund claims after the provisional assessment is conducted by the GST Officers are being provided to the claimant or the taxpayer with the applicable interest as per the Section 56 of the Central Goods and Services Tax (CGST) Act, 2017.

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.