Assessment means determination of tax liability. All taxpayers file return under GST based on self-assessment and then GST department starts assessment from their side to make sure that there is no short payment of tax. In this article we will discuss all types of assessment under GST-

1. Self Assessment - Every registered person under this act shall himself assess the tax payable by him for a tax period and after that he shall file the return.
2. Provisional assessment - Provisional assessment provides a method for determining the tax liability in case the taxable person is unable to determine value of supply or rate of tax. In this case taxable person may furnish an application electronically (through common portal or facilitation centre) in prescribed form for payment of tax on provisional basis (by execution of a bond). Then proper officer shall issue an order within a period of 90 days from the date of such request.

• Furnishing of bond and security - The payment of tax on provisional basis may be allowed if the taxable person executes a bond along with security. The security is required to be furnished in the form of bank guarantee for an amount up to 25% of the bond. The applicant may file an application for release of security after issue of final order.
• Finalisation of provisional assessment - Final assessment order has to be passed by proper officer within a period of 6 months from date of communication of order of provisional assessment. Extension of 6 months by joint/additional commissioner and further 4 years by commissioner can be done.
• Short/excess payment - If amount paid shortly then tax payer is required to pay amount with interest @18%p.a. If amount has been paid in excess, then refund will be given by department @6% p.a.

Assessment by department

There are three types of assessments, which may be conducted by the department against the taxable person-

1. Scrutiny assessment - The return furnished by a registered person may be selected for scrutiny by proper officer. In order to verify accuracy of return, the proper officer may examine return and seek explanation if any discrepancy is found. The registered person to whom notice is issued within a period of 30 days may accept or reject such discrepancy by giving explanation. If department finds that explanation is adequate no further action is required from department side but if it is not adequate then proper officer may proceed to conduct audit under section 65 or undertake procedures of inspection, search and seizure or initiate proceedings for determination of tax and other dues under section 73 or 74 of the act.
2. Best judgement assessment - Best judgement assessment is possible in following two cases-

• For non- filers of return - If return is not furnished even after service of notice, proper officer shall assess the liability of tax within a period of 5 years from due date of filing of annual return. But if registered person furnishes a valid return within 30 days, then assessment order shall be deemed to have been withdrawn.
• For unregistered person liable to pay tax - This section covers persons who are liable to obtain registration and failed to do that but have tax liability. This provision also covers the cases whose registration was cancelled. For assessment under this section, notice has to be issued by proper officer. The notice would contain grounds on which the assessment is proposed to be made. The taxable person is allowed a time of 15 days to furnish his reply. After considering that order will be passed. Time limit to may issue assessment order within a period of 5 years from due date of filing annual return.

3. Summary assessment - The summary assessment can be undertaken in case all of the following conditions are satisfied-

• The proper officer must have evidence that there may be a tax liability.
• The proper officer has obtained prior permission of additional/joint commissioner to assess the tax liability in summarised way.
• The proper officer must have sufficient ground to believe that any delay in passing assessment order would result in loss of revenue.
• Such failure to pay tax, penalty or interest must be due to reasons connected with tax payer like- insolvency, defaulting.

The summary assessment order can be withdrawn by the additional/joint commissioner, if he considers that such order is erroneous, on an application by taxable person within 30 days or his own motion and follow the procedure laid down under demands and recovery for determination of tax liability.

Important sections - Below is the list of all important sections related to assessment-