Provisional Assessment under GST

Provisional assessment under GST
(Section 60 of The CGST Act, 2017)

If you are unable to determine your tax liability, the GST law has the option to pay tax on a provisional basis. This article explains the procedure of provisional tax assessment under GST and lists out various online application forms under GST law. The procedure can be effectively used to avoid tax litigations.

The provisional assessment provides a way for calculating the tax liability in case the correct tax liability cannot be calculated at the time of supply. The inability to determine the tax amount can be of two types

1.      The inability to determining the rate of tax

2.     The Inability to determine the value of goods or services

The payment of provisional tax can be made only against a bond and security. At the time of finalization, the tax liability can either be high or less as compared to the provisionally paid tax. In case of an increase in the tax liability, the difference is payable along with interest at a specified rate from the first day after the due date of payment of tax till the date of actual payment and in case of the decrease in the tax liability, the amount will be refunded with interest at a specified rate.

Procedure: –

The assessee requesting payment of tax on a provisional basis has to furnish an application along with the supporting documents, electronically in FORM GST ASMT-01 on the common portal.

The Assistant Commissioner / Deputy Commissioner of Central Tax will scrutinize the application in FORM GST ASMT-01. In case, additional information or documents in support is required by the Assistant Commissioner / Deputy Commissioner of Central Tax to decide the case, notice in FORM GST ASMT-02 will be issued to the assessee requesting for submission of the same.

The assessee has to file a reply to the notice in FORM GST ASMT-03, and if he desires can also appear in person before the Assistant Commissioner / Deputy Commissioner of Central Tax to explain his view.

The Assistant Commissioner / Deputy Commissioner of Central Tax will then issue an order in FORM GST ASMT-04 within a period not later than 90 days from the date of receipt of Form GST ASMT-01, allowing the payment of tax on a provisional basis. The order will indicate the amount of tax payable and the amount for which the bond is to be executed along with the security to be furnished. The security in form of bank guarantee will not exceed 25 percent of the amount covered under the bond.

The assessee has to execute the bond in FORMGSTASMT-05 along with the security as bank guarantee for an amount as mentioned in FORM GST ASMT-04. After executing the bond the process of the provisional assessment is complete.

The provisional assessment has to be finalized within 6 months from the date of issuance of FORM GST ASMT-04. The Assistant Commissioner / Deputy Commissioner of Central Tax will issue a notice in FORM GST ASMT-06, calling for information and records required for finalization of assessment and shall issue a final assessment order, specifying the amount payable by the assessee or the amount refundable, if any, in FORM GST ASMT-07.

Once the order in FORM GST ASMT-07 is issued, the assessee has to file an application in FORM GST ASMT-08 for the release of the security furnished.

On receipt of this application, the Assistant Commissioner / Deputy Commissioner of Central Tax will issue an order in FORM GST ASMT-09 in within a period of 7 working days from the date of the receipt of the application for releasing the security after the amount payable specified in FORM GST ASMT-07 has been paid.