Assessment of unregistered persons - section 63 - GST Ready Reckoner - GST

Best Judgement Assessment of unregistered person Section 63 of CGST Act read with Rule 100 of CGST Rules states that Overiding the provisions of Section 73 74 [ or Section 74A (w.e.f. 01.11.2024 vide N.No. 17/2024 dated 27.09.2024) Inserted vide Finance (No. 2) Act, 2024 ] , where a taxable person fails to obtain registration even though liable to do so; or whose registration has been cancelled under section 29(2) but who was liable to pay tax the proper officer shall assess the tax payable by such person during the period he remains un-registered and pass the order in Form GST ASMT-15 and shall also serve a summary thereof electronically in FORM GST DRC-01 Such order shall be passed after serving a notice in FORM GST ASMT-14 allowing the time of 15 days and and summary thereof shall be uploaded electronically in FORM GST DRC-07 . Proper officer giving an opportunity of being heard to the taxpayer; Time limit of Assessment order:- The assessment order must be issued within a period of 5 year from the date specified under section 44 for furnishing of the annual return for the financial year (i.e. 31 December following the financial year, unless extended) within 5 years from the due date for fifing of the annual return of the relevant year. it means that if transaction of non filer pertain for F.Y. 2017-18, then, the proper officer pass till 31 Dec. 20218 + 5 year i.e. 31 dec. 2023. Proper officer for Best Judgement [ Circular No. 3 / 3 / 2017 - GST dated 05/07/2017 ] It is clarifies Deputy or Assistant Commissioner of Central Tax shall be proper officer for the purpose of section 63 CGST Act. OBSERVATIONS IN SECTION 63 Applicable only to unregistered persons. Assessment is difficult to do as Department is not having any direct data. They have to resort to third party sources like information shared with Income Tax, ROC, etc. Information can be gathered by initiating search and seizure proceedings after taking necessary approvals Section 63 overrides the provisions of section 73 or 74 or 74A to the extent they are contrary . Thus, demand can be confirmed u/s 63 without resorting to section 73 or 74 or 74A. Time limit of five years to serve the best judgement order from the due date of filing of GSTR-9 for the relevant period. DISTINCTION BETWEEN 62 AND 63 W.R.T. BEST JUDGEMENT Section 62 provides for assessment of non-filers of return to the best of judgement taking into account all the relevant material which is available or which he has gathered. Therefore, proper officer has to take into account all the relevant material which is available on record or he has gathered. However, provision of section 63 does not provide for taking into consideration any relevant material available on record or which he has gathered but to the best of his judgement. But even then, provisions of section 63 cannot give an unfettered right to the proper officer to assess the person to an estimate which is a pure guess work.