ASSESSMENTS AND AUDITS

  1. Assessments

The GST laws prescribe different proceedings for assessing the tax liability of the tax payers. These are briefly described below:

  1. Self -Assessment (S.59)

    Every registered person is required to self-assess his / her tax liability and furnish a periodical return as may be specified.

  2. Provisional Assessment (S.60)

    Where a taxable person is unable to determine value of supply or rate of tax, he may apply to the Proper Officer (PO) for payment of tax on provisional basis. The PO shall pass an order within period of 90 days from date of receipt of request allowing the tax payer to pay tax on provisional basis at such rate or on such value as the PO may specify; For this purpose, the taxable person shall execute a bond (with surety or security) for payment of difference between amount of tax provisionally assessed and finally assessed. The PO shall pass a final assessment order within 6 months. The payment of tax provisionally or finally assessed will be subject to levy of interest.

  3. Scrutiny of returns (S.61)

    The (PO) may scrutinize the returns to verify its correctness and inform discrepancies noticed to registered person and seek his explanation thereto. If explanation received is satisfactory then no further action shall be taken. If, however, the explanation received is not satisfactory or where the registered person after having accepted the discrepancy fails to take corrective action, then the PO may initiate action under other provisions of the GST law.

  4. Assessment of non-filers of returns (S.62)

    If registered person fails to furnish return including the final return, the PO may assess tax liability of such person on best judgement basis within 5 years from the date specified u/s 44 for furnishing of the annual return. If valid return is furnished by registered person within 30 days of service of assessment order, then the above assessment order shall be deemed to be withdrawn.

  5. Assessment of unregistered persons (S.63)

    Where taxable person fails to obtain registration or whose registration is cancelled but who was liable to pay tax, then the PO may assess tax liability to the best of his judgement within 5 years from the date specified u/s 44 for furnishing of the annual return.

  6. Summary Assessment (S.64)
    • If PO has any evidence showing tax liability of a person, he may, to protect the interest of revenue, proceed to assess the tax liability of such person to protect interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay may adversely affect the interest of revenue.
    • If person to whom liability pertains is not ascertainable the person in charge of goods can be assessed.
  1. Audits

AUDIT

Audit by tax authorities (S.65)

Special Audit (S.66)

  • Commissioner or any officer authorised by him may undertake audit of registered person (RP)
  • May be initiated at any stage of scrutiny, inquiry or investigation, if Assistant Commissioner (AC) (or any officer of a higher rank) is of the opinion that value has been incorrectly declared or the credit availed is not within normal limits
  • Audit may be conducted at the place of business of the RP or in their office.
  • AC shall direct to RP to get his books of accounts audited by a Chartered Accountant (CA) or Cost Accountant, as nominated by Commissioner
  • Prior notice of at least 15 working days is required to be served
  • CA or Cost Accountant shall submit audit report within 90 days to the AC.
  • Audit shall be completed within 3 months from the date of commencement of audit
  • Further extension of 90 days may be granted by AC on an application by the RP or the CA or Cost Accountant
  • Extension of further 3 months can be granted by Commissioner
  • The audit will be conducted notwithstanding that the accounts of RP have been audited under other provisions of the GST law or under any other law.

Audit by tax authorities

Special Audit

  • On Conclusion registered person shall be informed about findings, rights and obligations and the reasons for such findings
  • The expenses of the examination and audit including the remuneration of the CA or Cost Accountant shall be determined and paid by the Commissioner and such determination shall be final.