Navigating Provisional Assessment Under GST: A Practical Guide
If you’ve ever delved into the world of Goods and Services Tax (GST), you’re probably aware of how complex it can be. But fret not! Today, we’re going to break down one intriguing aspect of GST – Provisional Assessment – in a way that’s easy to understand.
Section 60: The Gateway to Provisional Assessment
GST has come a long way since its launch in July 2017. Under Section 60, it allows a taxpayer to make a provisional assessment of goods or services when they can’t precisely determine the value or tax rate applicable.
How to Initiate a Provisional Assessment?
When you find yourself in a situation where estimating the value or tax rate becomes a puzzle, you can initiate a provisional assessment. Here’s how:
- File an Application: You need to submit an application in GST ASMT-01, explaining why a provisional evaluation is necessary.
- Electronic Submission: These applications and related documents should be sent electronically through the common portal or a facilitation center authorized by the commissioner.
What Happens Next?
Once your application lands in the hands of the proper officer (the GST authority), they might issue a notice (GST ASMT-02) if more information or documents are required to support the provisional assessment.
Responding to the Notice
If you receive a notice, you must respond using Form GST ASMT-03. You can also choose to appear in person to state your case.
The Provisional Assessment Order
The proper officer uses GST ASMT-04 to issue the Provisional Assessment Order, which remains valid for 90 days. This order allows you to pay taxes provisionally based on the value or rate specified.
Bonds and Security
You’ll need to execute a bond and provide security as per the proper officer’s decision. The security should not exceed 25% of the bond amount. If you already have a bond under the State Goods and Services Tax Act or Integrated Goods and Services Tax Act, it can be considered.
The Final Assessment
Once you’ve gone through the provisional assessment process, you’ll receive a notice (GST ASMT-06) indicating the completion of the provisional assessment. This notice may also request additional details needed for finalization. The final assessment order (GST ASMT-07) specifies your tax liability or refund, as applicable.
Time Limits for Assessment
The proper officer has six months from the date of the order to complete the final assessment. This period can be extended for another six months by the Commissioner or Additional Commissioner, with the potential for a maximum extension of four years.
Interest on Tax and Refund
Any tax due is liable to interest at a rate of 18% per annum from the due date, irrespective of the date of the final assessment order. The interest rate for refunds is 6% per annum, calculated from the date of receipt of the refund application and paid until the final payment.
Release of Security
After the final assessment order, you can apply for a refund of the security you provided earlier. The proper officer should release the security and provide the order in Form ASMT-09 within seven working days of receiving the refund application.
Section 60 is like a safety net for taxpayers who find themselves in situations where they can’t determine the right tax rates or values. It’s a temporary measure designed to simplify the tax payment process, ensuring fairness and accuracy in GST calculations.
So there you have it, your comprehensive guide to the intriguing world of Provisional Assessment under GST. With this knowledge, navigating the complex world of taxes becomes a tad bit easier. Happy taxing!