Provisional Assessment in GST- A Goods and Service Tax supplier will come to know the extent of his GST liability which has to be discharged on a continuous and regular basis only after GST assessment. Assessment means determination of tax (GST) liability and includes other assessment like- GST self-assessment, GST re-assessment, GST provisional assessment, GST summary assessment and GST best judgment assessment.
The different types of assessment under GST Law are as under:
- Section 59 of CGST Act – Self assessment of taxes payable
- Section 60 of CGST Act – Provisional assessment (Provisional Assessment Order)
- Section 61 of CGST Act – Scrutiny of tax returns filed by registered taxable persons
- Section 62 of CGST Act – Assessment Non-Filers of Returns (Best Judgement Assessment)
- Section 63 of CGST Act – Assessment of unregistered persons
- Section 64 of CGST Act – Summary assessment in special cases….Click for read more
The major determinants of the tax (GST)liability are generally the applicable tax rate and the value. There might be situations when these determinants might not be readily ascertainable and may be subject to the outcome of a process that requires deliberation and time. Hence like under the any previous laws, when due to various circumstances it might not be always possible, at that point of time, to carry out an assessment and determine the exact duty liability, the GST law also provides for GST provisional assessment.
The Asst. Commissioner/Dy. Commissioner of Goods and Service Tax provisionally determines the amount of tax payable by the supplier and is subject to final determination. On provisional assessment, the supplier can pay goods and service tax on provisional basis but only after he executes a bond with security, binding them for payment of the difference between the amount of Goods and Service Tax as may be finally assessed and the amount of Goods and Service Tax Provisionally assessed. On finalization of the Provisional GST assessment, any amount that has been paid on the basis of such GST assessment is to be adjusted against the amount that has been finally determined as payable.In case of short payment of GST , the same has to be paid with interest and in case of excess payment, the same will be refunded with interest.
In case a supplier is unable to determine the value of goods or services or both or to determine the rate of tax (GST) applicable thereto, he can request the Asst. GST Commissioner/Dy. GST Commissioner of Good and Service Tax in writing, giving reasons for payment of Goods and Service tax on a provisional basis. The supplier requesting for payment of Goods and Service Tax on a provisional basis has to furnish an application along with the documents in support of his request, electronically in GST FORM ASMT-01 on the common portal of GST, either directly or through a Facilitation Centre notified by the GST Commissioner.
The Asst. Commissioner/Dy. Commissioner of Goods and Service Tax (GST) will scrutinize the application in GST FORM ASMT-01. In case, additional information or documents in support is required by the Assistant Commissioner/Deputy Commissioner of Goods and Service Tax to decide the case, notice in FORM GST ASMT-02 will be issued to the supplier requesting for submission of the same.
The supplier has to file a reply to the notice in GST FORM ASMT – 03, and if he desires can also appear in person before the Asst. Commissioner/Dy. Commissioner of GST to explain his case.
The Asst. Commissioner/Dy. Commissioner of GST will then issue an order in GST FORM ASMT-04 within a period not later than (ninety)90 days from the date of receipt of the request, allowing the payment of GST on a provisional basis.The order will indicate the value or the rate or both on the basis of which the GST assessment is to be allowed on a provisional basis and the amount (this amount shall include the amount of Integrated Goods and Service tax, Central Goods and Service tax, State Goods and Service tax or Union territory tax and less payable in respect of the transaction) for which the bond is to be executed along with the security to be furnished. The security will not exceed 25% (twenty-five) of the amount covered under the bond.
The supplier has to execute the bond in GST FORM ASMT-05 along with a security in the form of a bank guarantee for an amount as mentioned in GST FORM ASMT-04.A bond furnished to the proper officer under the (SGST) State Goods and Services Tax Act or (IGST) Integrated Goods and Services Tax Act shall be deemed to be a bond furnished under (CGST) Central Goods and Services Tax Act.
On executing the bond, the process of the GST provisional assessment is complete and the supplier can supply the goods or services or both and pay the tax at the rate or on the value that has been indicated in the order in GST FORM ASMT-04.
Finalization of provisional assessment
The provisional assessment will be finalized, within a period not exceeding six months from the date of issuance of GST FORM ASMT-04. The Asst. Commissioner/Dy. Commissioner of Goods and Service Tax will issue a notice in GST FORM ASMT-06, calling for information and records required for finalization of GST assessment and shall issue a final GST assessment order, specifying the amount payable by the registered person or the amount refundable, if any, in GST FORM ASMT-07.
On sufficient cause being shown and for reasons to be recorded in writing, the time limit for finalization of provisional Goods and Service Tax Assessment.
can be, extended by the GST Joint Commissioner or Additional Goods and Service Tax Commissioner for a further period not exceeding 6 (six) months and by the Commissioner for such further period not exceeding 4(four) years.
In case any Goods and Service tax amount becomes payable subsequent to finalization of the provisional gst assessment, then interest at the specified rate will also be payable by the supplier from the first day after the due date of payment of the tax till the date of actual payment of tax, whether such amount is paid before or after the issuance of order for final GST assessment.
In case any GST amount becomes refundable subsequent to finalization of the provisional GST assessment, then interest (subject to the eligibility of refund and absence of unjust enrichment) at the specified rate will be payable to the supplier.
Release of Security consequent to Finalization
Once the order in GST FORM ASMT-07 is issued, the supplier has to file an application in GST FORM ASMT- 08 for the release of the security furnished. On receipt of this application the Asst. Commissioner/Dy. Commissioner of Good and Service Tax will issue an order in GST FORM ASMT–09 within a period of 7 (seven) working days from the date of the receipt of the application, releasing the security after the amount payable if any as specified in GST FORM ASMT-07 has been paid.
Provisional GST assessment provides a method for determining the tax liability in case the correct Goods and Service tax liability cannot be determined at the time of supply. The payment of provisional Goods and Service Tax is allowed only against a bond and security. The provisional GST assessment has to be finalized within 6 (six) months unless extended. On finalization, the Goods and Service tax liability can either be more or less as compared to the provisionally paid (GST) tax. In case of increase in the tax (GST) liability, the difference is payable along with interest and in case of decrease in the (GST) tax liability the amount will be refunded with interest.
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