Provisional Assessment section 60 - GST Ready Reckoner - GST

Provisional Assessment Section 60(1) (2) of CGST Act, 2017 read with Rule 98 states where the taxpayer is unable to determine the tax liability correctly and such inability is covered by the circumstances enumerated under the provisions of this section he may opt for making provisional payment of tax. When can option for Provisional assessment be excercised The registered person needs to follow the process of making a request application to the proper officer. Such request can be made only under the following two circumstances: if he is not able to determine the value of the supplies, or if he is not certain about the tax rate applicable to such supplies. The registered person need to be execute a bond and security to be furnished not exceeding twenty five per cent. of the amount covered under the bond. The proper officer has to pass an order within a period not later than 90 days. Time limit for finalization of provisional assessment [ As per section 60(3) ] Final assessment has to be finalized within a period of Six months Extention Of Time limit:- As per Section 60(3) This period of six months may be extended by the Additional/Joint Commissioner if sufficient causes are shown that the order cannot be finalized in six month; such extension will be for a period not exceeding six months. Further Extension :- The Commissioner may extend this period (after the first extension) to such other period not exceeding four years, that he may deem fit. Thus , a provisional assessment can remain provisional for a maximum of 5 year. In case Of Default in respect to differential amount of tax liable to interest Where the tax liablity as per the final assessment is higher than in provisional assessment [ Section 60(4) ] Interest on excess payment:- The registered person shall be liable to pay interest. Amount on which interest payable :- The registered person shall be liable to pay interest on any tax payable on the supply of goods or services or both under the provisional assessment but not paid by the due date specified under sub-section (7) of section 39 or the rules made thereunder, Rate of Interest applicable:- at the rate specified under sub-section (1) of section 50 (i.e. 18%) Period:- the interest shall be payable from the first day after the due date of payment of tax in respect of the said supply of goods or services or both till the date of actual payment, whether such amount is paid before or after the issuance of the final assessment order . Where the tax liablity as per the final assessment is less than in provisional assessment [ Section 60(5) ] Make application for refund:- such person will have to make an application for refund electronically at the common portal under Section 54 of the Act. Time period of claiming refund:- The refund claim has to be filed within 2 years from the date of order of final assessment. The claim for refund (if it is not a zero rated supply) will have to pass the test of unjust enrichment. Interest on refund :- If the refund is not given within 60 days from the date of receipt of refund claim, interest not exceeding 6% shall be paid on such refund as provided in section 56 . Release of security [ Rule 98 (6) (7) ] The applicant may file an application in FORM GST ASMT- 08 for the release of the security furnished under sub-rule (4) after issue of the order under sub-rule (5). The proper officer shall release the security furnished under sub-rule (4), after ensuring that the applicant has paid the amount specified in sub-rule (5) and issue an order in FORM GST ASMT 09 within a period of seven working days from the date of the receipt of the application. Authority for Provisional assessment Circular No. 3 / 3 / 2017 - GST clarifies that Deputy or Assistant Commissioner of Central Tax has been designated as proper Officer for the purpose of Provisional assessment under Section 60(1). Procedure For Provisional Assessment As per Rule 98 1) Every registered person requesting for payment of tax on a provisional basis in accordance with the provisions of sub-section (1) of section 60 shall furnish an application along with the documents in support of his request, electronically in FORM GST ASMT-01 on the common portal, either directly or through a Facilitation Centre notified by the Commissioner. (2) The proper officer may, on receipt of the application under sub-rule (1), issue a notice in FORM GST ASMT-02 requiring the registered person to furnish additional information or documents in support of his request and the applicant shall file a reply to the notice in FORM GST ASMT 03 , and may appear in person before the said officer if he so desires. (3) The proper officer shall issue an order in FORM GST ASMT-04 allowing the payment of tax on a provisional basis indicating the value or the rate or both on the basis of which the assessment is to be allowed on a provisional basis and the amount for which the bond is to be executed and security to be furnished not exceeding twenty five per cent. of the amount covered under the bond. (4) The registered person shall execute a bond in accordance with the provisions of subsection (2) of section 60 in FORM GST ASMT-05 along with a security in the form of a bank guarantee Provided that a bond furnished to the proper officer under the State Goods and Services Tax Act or Integrated Goods and Services Tax Act shall be deemed to be a bond furnished under the provisions of the Act and the rules made thereunder. Explanation .- For the purposes of this rule, the expression amount shall include the amount of integrated tax, central tax, State tax or Union territory tax and cess payable in respect of the transaction. (5) The proper officer shall 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 registered person or the amount refundable, if any, in FORM GST ASMT-07 . (6) The applicant may file an application in FORM GST ASMT- 08 for the release of the security . (7) The proper officer shall release the security furnished under sub-rule (4), after ensuring that the applicant has paid the amount specified in sub-rule (5) and issue an order in FORM GST ASMT 09 within a period of seven working days from the date of the receipt of the application.