Understanding Diverse GST Assessment Procedures

This article delves into the various assessment methods under the Goods and Services Tax (GST) regime, going beyond the scope of self-assessment, provisional assessment, and scrutiny assessment. Here, we explore the remaining assessment types within GST.

Best Judgment Assessment Under GST

In a best judgment assessment, an assessing officer determines the tax liability based on their rationale and all available information, ensuring an unbiased evaluation. Under GST, a best judgment assessment is applicable in two specific situations:

• When a taxable person has failed to file a return.
• When an individual has not registered for GST despite being legally liable to do so.

Assessment of Non-Filers

If a registered taxable person neglects to file their return, even after receiving a notice under Section 62, the proper officer will estimate their tax liability using their best judgment, based on the information at hand. Unlike previous service tax laws, a notice for a hearing may not be provided. The assessment order must be issued within five years from the annual return's due date.

Filing a Valid Return

Should the taxable person submit a valid return, which includes the payment of all due taxes, within 30 days of receiving the best judgment assessment order, the order will be retracted. However, any late fees, penalties, or interest specified in the best judgment order will still be required.

Amnesty Scheme for Non-Filers (Deemed Withdrawal of Best Judgment Assessment Order)

According to CGST Notification 06/2023, issued on March 31, 2023, non-filers who had previously missed the 30-day window for submitting pending returns (if the original order was issued on or before February 28, 2023) were granted a new filing period from April 1, 2023, to June 30, 2023. This scheme allows for the withdrawal of such best judgment assessment orders, even if an appeal had been filed or decided, provided that all outstanding returns are properly filed with the payment of applicable taxes, late fees, and interest as per the law.

Assessment of Unregistered Persons

This process concerns a taxable individual who has not obtained GST registration despite being legally obligated. The officer will determine the tax liability for relevant tax periods using their best judgment. An assessment order can be issued within five years from the due date of the annual return for the year in which the tax was not paid. The taxable person will receive a show cause notice and an opportunity to be heard before any order is passed. If it is found that the individual failed to register when liable, demand and recovery procedures for unpaid tax will commence, along with penalties for non-registration. This measure ensures that even unregistered individuals are assessed to verify their compliance.

Summary Assessment

A summary assessment is performed when the assessing officer has sufficient reason to believe that any delay in determining a tax liability could jeopardize government revenue. To safeguard revenue interests, a summary assessment can be issued promptly based on evidence of tax liability, requiring prior permission from an Additional or Joint Commissioner. This fast-track assessment is completed without the taxpayer's direct presence, as delays might lead to revenue loss. It is typically applied in cases involving defaulting or absconding taxpayers.

Withdrawal of Summary Assessment

The taxpayer can apply for the cancellation of a summary assessment order within 30 days of its receipt. If they can convince the Additional or Joint Commissioner that the order was improperly issued, it will be revoked. The Additional or Joint Commissioner also possesses the authority to cancel the order independently if they conclude it was wrongly passed. Following a cancellation, the demand and recovery provisions outlined in Sections 73 and 74 will apply.

Summary assessments are often carried out in situations where identifying the taxable person involved in a supply of goods is challenging. In such instances, the individual responsible for the goods is considered the taxable person, assessed, and held accountable for the tax and amounts due under the summary assessment. This specific provision, however, does not extend to services.

Overall, many of the assessment provisions under GST are consistent with existing indirect tax systems.