Assessment of Tax Liability in GST
Assessment of tax means determination of the tax liability of a person. The tax liability of a person is the amount of tax to be paid by a person during a tax period. The types of assessment of tax under GST remain similar to those in the current regime. Broadly, there are 2 types of assessments – assessment by the taxable person himself/herself, i.e., self-assessment, and assessment by the tax authorities.
Assessment by the tax authorities are of 4 types:
- Provisional assessment
- Scrutiny assessment
- Best judgement assessment
- Summary assessment
Let us understand these in detail.
Self-Assessment
Every registered taxable person must assess the tax payable by himself/herself and furnish the relevant return for each tax period. Based on the type of taxable person, the returns to be furnished have been specified. This is explained in detail in our blog Type of Returns under GST
For example: A registered regular dealer must furnish Form GSTR-3 on a monthly basis and Form GSTR-9 annually. This is the incidence where the tax payer is conducting self-assessment.
Assessment by the Tax Authorities
1. Provisional Assessment
If a taxable person is unable to determine the value of goods and/or services or determine the rate of tax applicable, the person can request an officer to allow payment of the tax on a provisional basis. The officer will pass an order allowing the person to pay the tax on a provisional basis. The rate of tax and the taxable value will be specified by the officer. The person has to execute a bond and surety or security, as the officer thinks is fit. The bond is binding on the person for payment of the difference between the amount of tax provisionally assessed and finally assessed.
Within 6 months from the date of the provisional assessment order, the officer must pass the final assessment order.
The person will be liable to pay interest on any additional tax payable under provisional assessment but not paid on the due date, i.e. 20th of the month. Interest will be liable from the 21st of the month till the date of actual payment, irrespective of whether the amount is paid before or after the final assessment order. If the person is eligible for a refund as per the final assessment order, interest will be paid on the refund amount.
For example: A registered person manufactures a new product for which the HSN code and tax rate are not available. In this case, the person seeks a provisional assessment of the tax payable by him.
2. Scrutiny Assessment
Under scrutiny assessment, an officer can examine the return and other information furnished by a person, to verify the correctness of the return.
If any discrepancy is noticed, the officer will inform the person and seek his explanation. If the explanation is satisfactory, no further action will be taken. In case no satisfactory explanation is given within 30 days of being informed or if the person does not make corrections in the return after accepting the discrepancies, the officer will initiate appropriate action.
For example: As part of the regular scrutiny assessment, an officer examines Form GSTR-3 filed by a registered person and has doubts regarding the transaction value and tax levied in certain transactions. In such a case, the officer will seek an explanation from the dealer.
3. Best Judgement Assessment
Under best judgement assessment, an officer will assess the tax liability of a person to the best of his/her judgement. The circumstances for this are:
a. Assessment of non-filers of returns– If a person fails to furnish a return, even after a notice is served to the person, an officer will assess the tax liability of the person to the best of his judgement. All relevant material which is available or which the officer has gathered will be taken into account. He will then issue an assessment order within 5 years from the due date of filing of the annual return for the year in which the tax return was not filed.
If the person furnishes the return within 30 days from the assessment order, the assessment order will be withdrawn.
For example: A regular dealer does not furnish Form GSTR-9 for a financial year, even after receiving a notice from the Tax department. In such a case, an officer will initiate best judgement assessment to assess the tax payable by the person.
b. Assessment of unregistered persons– If a taxable person fails to obtain registration even though he/she is liable to do so, an officer will assess the tax liability of the person to the best of his judgement for the relevant tax periods, and issue an assessment order within 5 years from the due date of filing of the annual return for the year in which the tax was not paid.
For example: During an inspection, an officer finds that a person has not registered under GST though his turnover exceeds the threshold limit. The officer will initiate a best judgement assessment and assess the tax liability of the person.
4.Summary Assessment
In certain special cases, an officer may, on finding any evidence showing tax liability of a person which comes to his notice, with the permission of the Additional/Joint Commissioner, assess the tax liability of the person to protect the interest of revenue, and issue an assessment order if he has sufficient grounds to believe that any delay in doing so will adversely affect the interest of revenue.
For example: On the basis of Form GSTR-3 filed by a registered regular dealer, an officer initiates summary assessment as he finds enough evidence to believe that a significant loss of revenue can be recovered from the person.
It is important for a taxable person to be aware of the different types of assessment under GST and adhere to the compliance requirements. Self-assessment is most important for every registered person. It is important to furnish accurate information and pay tax due on a timely basis, as per the due dates laid down. Self-assessment done appropriately ensures that assessment is not initiated by the tax authorities. In a case where an assessment is initiated by the tax authorities, a dealer must ensure to furnish the information asked for by the time given. Businesses must make use of the facilities of compliance and technology to remain compliant under GST.
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I purchased this one trying to find a great gifts for the mother. The headphone came in a awesome purple tied container. This was ideal looking gifts below the actual xmas tree!! The particular headphone always looked striking, although my personal mother is actually great boned and headphone is actually some tight, and yet its outstanding gift! I love it.
Thank you tally team
Hi, I am practising recently for GST ,IT,CST by Collecting details and reference from
Internet. My question is at present any software launched for gst for uploading transaction like sales invoices,stock etc….
Subiraj
how will we know under which authority do we lie ? i mean to say that till now VAT liability is assessed by the state department and excise liability is assessed by the central. which department will assess the GST liability ? please help.
GST will be jointly administered by the Central and State departments. CGST will be collected by the Central Government and SGST will be collected by the State Government on intra-state supplies. IGST on inter-state supplies will be shared by the Central Government and respective State Government.
GST M COMPOSITION SCHEME BHI H KYA ???
We suggest you to refer our blog on this http://blogs.tallysolutions.com/gst-composition-levy-explained/
Yes.. there is composition scheme dealer whos annual turn over less than 50 lacs and only for supply goods not for services and also not allowed for interstate purchases..
A composition dealer cannot make interstate outward supplies. Interstate inward supplies are allowed. We suggest you to refer http://blogs.tallysolutions.com/gst-composition-levy-explained/ for more details.
HOW TO TAKE CVD INPUT CREDIT ON STOCK, IF STOCK IMPORT BY US AND IMPORT MATERIAL PURCHASE BY LOCAL DEALER, AND WHAT NEED THE EVIDENCE OF DOCUMENT FOR AVAILED
We suggest you to refer our blog http://blogs.tallysolutions.com/gst-imports-and-exports/
How the tax liability of MRP goods will be assartain? At present in medicine industry VAT is calculated @ 4.86% on MRP, i.e MRP is including of VAT @ 5%
how can traet the supply to csd canteen/govt canteen in gst
How to register as a TRP?
Thanks for sharing..
Harmonised System Nomenculture is the expansion of HSN code
Sir,
what about GST on work contractors as we are under work contractor. What will the procedure to calculate gst liability. and can we claim input against spare and others?
As of till now you know that work contracts are taxable under abatement scheme, that we levy tax liability by abatement of around 60% of the contract amount and then 50% of the 60% will be charged as VAT and 40% Asses able value for Service Tax. This would be liable to pay tax under G.S.T while abatement may will finish as in present.
What is HSN Code
Very Very helpful & useful to me as a tax consultant.
Dear Sir, I am a govt bankar working as clerk. Want to do accounting work for jewellery shops as part time job.
Plz guide the version of tally if compatible with jewellery business and other guidance.
Hiii..
I m trading in wheat Dalia.what will be the GST rate if I m bringing Dalia from one State and selling in another state
Nil Rate …
HSN CODE:1001
Comes under Cereals!
Dear Experts,
1) Kindly let me know the procedure how to become a TRP of a company where he/she is an employee.
2) To become a TRP is there any website to get registered online? if not yet then how long it will take? or have to get registered manually? if yes then what time can I do this?
Kindly help me out on this matter.
Regards
informative ..thx
Tally Blogs on GST helps me prepare and direct my clients. Any topic on GST would help us all even it is a repetition. Thanks.
Very Very helpful & useful to me as a tax consultant.
GST.OK.SRI.RAJINI.UR.Call\9659133557
Dear Sir/Madam,
1.What is minimum educational qualification for Tax return Preparer in GST regime?
2.Can one Tax Return Preparer, file/ undertake multiple companies return work?
3.Fresh fruit importer at present not paying VAT/Sales tax when selling on whole sale basis, after GST whether they will come under GST? have to pay tax?
please give me your valuable advise?
Thanks
Sunil Wadekar
1. We suggest you to refer our blog http://blogs.tallysolutions.com/gst-tax-return-preparer/
2. Yes, a tax return preparer can provide services to all persons who authorise the tax return preparer to do so.
3. As an importer, you have to pay tax on reverse charge basis. Persons who pay tax on reverse charge basis have to mandatorily register. However, the commodity wise rate structure is yet to be announced. If it so happens that you are dealing in 100% exempt commodities, you will not need to register. Once the rate list is announced, this clarity will be available.