ASSESSMENT OF UNREGISTERED PERSONS - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

9. ASSESSMENT OF UNREGISTERED PERSONS 9.1 Section 63 of the CGST Act, 2017 provides that when a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under sub section (2) of Section 29 of the CGST Act, 2017 but who was liable to pay tax, the proper officer may proceed to assess the tax liability of such taxable person to the best of his judgement for the relevant tax periods. 9.2 Under Section 63 of the CGST Act, 2017, even when a taxable person is unregistered , the proper officer is vested with jurisdiction to not only identify taxable transactions but also pass an order of assessment on best judgement basis and fasten an enforceable demand. However, once registration is obtained, use of best judgement method permitted in case of unregistered persons cannot be applied against registered persons even for the period prior to their date of registration. 9.3 For assessment of unregistered person, the proper officer has to resort to third party sources like information shared with Income Tax, ROC, etc. Information can also be gathered by initiating search and seizure proceedings after taking necessary approvals of the Competent Authority. 9.4 The proper officer will issue an assessment order within a period of five years from the due date for furnishing of the annual return for the financial year to which the tax not paid relates. 9.5 No such assessment order shall be passed without giving the person an opportunity of being heard. 9.6 Rule 100(2) of the CGST Rules, 2017 prescribes that the proper officer shall issue a notice to a taxable person in accordance with the provisions of Section 63 of the CGST Act, 2017 in FORM GST ASMT-14 containing the grounds on which the assessment is proposed to be made on best judgment basis and shall also serve a summary thereof electronically in FORM GST DRC-01 . 9.7 After allowing a time of fifteen days to furnish reply, if any, the proper officer shall pass an order in FORM GST ASMT-15 and summary thereof shall be uploaded electronically in FORM GST DRC-07.