Assessments and Audit Under GST – Advanced Tax Laws and Practice Important Questions
Question 1.
Who is the person responsible to make assessment of taxes payable under the CGST Act?
Answer:
Every person registered under the CSGT Act, 2017 shall himself assess the tax payable by him for a tax period and after such assessment he shall file the return required under section 39 of CGST Act, 2017.
Self-Assessment will be the norm under GST. As per sec. 39 of the CGST Act, 2017, the taxable persons other than ISD/TCS/TDS/Non-resident and composition levy tax persons shall for every calendar month or part there of, furnish GSTR-3 Return electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as prescribed under GSTR 3 return format on or before the 20th day of the month succeeding the tax period (the month for which return is filed).
Self-Assessment is a process whereby a person first assesses, tax payable by him, pays the tax and then files the return furnishing the details of how he has arrived at the tax payable by him. The assessment as made by the registered person would be treated as final.
Question 2.
Write a brief note on provisional assessment under section 60 of the CGST Act, 2017.
Answer:
Provisional assessment (Section 60 of the CGST Act, 2017):
According to section 60(1) of the CGST Act, 2017 where the taxable person J is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on a provisional basis.
The proper officer (i.e. the Asst. Commissioner/Dy. Commissioner of Central Tax) shall pass an order, within a period not later than 90 days from the date of receipt of such request, allowing payment of tax on provisional basis at such rate or on such value as may be specified by him.
The Asstt. Commissioner/Dy. Commissioner of Central Tax provisionally determines the amount of tax payable by the supplier and is subject to final determination.
On provisional assessment, the supplier can pay tax on provisional basis but only after he executes a bond with security, binding them for payment of the difference between the amount of tax as may be finally assessed and the amount of tax provisionally assessed.
Question 3.
Write a brief note on Summary Assessment?
Answer:
Summary Assessment is stated under Section 64 of CGST Act. The authorized office is required to obtain prior permission of additional commissioner or joint commissioner to take this assessment. To protect the interest of revenue, a GST officer can proceed to assess the tax liability of a person showing a tax liability with any evidence.
The officer can also issue an assessment order if he has proof that the delay in assessment can adversely affect the interest of revenue.
Section 64 of the CGST Act provides that:
The proper officer may, on any evidence showing a tax liability of a person coming to his notice, with the previous permission of Additional Commissioner or Joint Commissioner, proceed to assess the tax liability of such 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 may adversely affect the interest of revenue.
Provided that where the taxable person to whom the liability pertains is not ascertainable and such liability pertains to supply of goods, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and liable to pay tax and any other amount due under this section.
Rule 100(3):
The order of assessment under sub-section (1) of section 64 shall be issued in FORM GST ASMT-16 and a summary of the order shall be uploaded electronically in FORM GST DRC-07.
On an application made by the taxable person within thirty days from the date of receipt of order passed under sub-section (1) or on his own motion, if the Additional Commissioner or Joint Commissioner considers that such order is erroneous, he may withdraw such order and follow the procedure laid down in section 73 or section 74.
Rule 100(4):
The person referred to in sub-section (2) of section 64 may file an application for withdrawal of the assessment order in FORM GST ASMT-17.
Rule 100(5):
The order of withdrawal or, as the case may be, rejection of the application under sub-section (2) of section 64 shall be issued in FORM GST ASMT-18.
Question 4.
Enumerate and explain the types of Audits envisaged under GST law.
Answer:
According to section 2(13) of CGST Act, the term “Audit” refers to the examination of:
Records, returns, and other documents kept or filed by the registered person under the Act
Rules or guidelines under GST or any other law for the time being in force.
This examination is undertaken to check the correctness of the turnover mentioned, taxes paid, refund claimed and ITC availed. Further, this scrutiny is undertaken to evaluate the taxpayer’s compliance with the provisions of the Act.
GST envisages three types of Audit.
- By a Chartered Accountant or a Cost Accountant.
- By Tax Authorities
- Special Audit
1. Audit by Chartered Accountant or a Cost Accountant:
Every registered person whose aggregate turnover during a financial year exceeds two crore rupees has to get his accounts audited by a Chartered Accountant or a Cost Accountant and furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C.
2. Audit by Tax Authorities (section 65 of the CGST Act, 2017):
The Commissioner or any officer authorised by him, can undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed.
Section 65(3) of the CGST Act, 2017 the registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed.
Section 65(4) of the CGST Act, 2017 the audit under sub-section (1) shall be completed within a period of three months from the date of commencement of the audit:
Provided that where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months.
3. Special Audit [Section 66 of the CGST Act, 2017]:
The registered person can be directed to get his records including books of account examined and audited by a Chartered Accountant or a Cost Accountant during any stage of scrutiny, inquiry, investigation or any other proceedings; depending upon the complexity of the case.
Procedure:
During the scrutiny, inquiry, investigation or any other proceedings of a registered person, the Assistant Commissioner or any officer senior to him, having regard to the nature and complexity of the case and the interest of revenue, might be of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits.
In such cases, with the prior approval of the Commissioner, the Assistant Commissioner or any officer senior to him can direct the registered person in FORM GST ADT-03 to get his records including books of account examined and audited by a specified chartered accountant or a cost accountant.
The chartered accountant or a cost accountant will be nominated by the Commissioner. The chartered accountant or cost accountant so nominated has to submit a report of such audit within the period of ninety days, duly signed and certified by him to the Assistant Commissioner, extendable by further 90 days. On conclusion of the special audit, the registered person shall be informed of the findings of the special audit in FORM GST ADT-04.
Where the special audit results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the process of demand and recovery will be initiated against the registered person.
Question 5.
Write a brief note on Special Audit under Section 66 of the CGST Act, 2017.
Answer:
Special Audit [Section 66 of the CGST Act, 2017]:
Special Audit the registered person can be directed to get his records including books of account examined and audited by a Chartered Ac-countant or a Cost Accountant during any stage of scrutiny, inquiry, investigation or any other proceedings; depending upon the complexity of the case.
Procedure:
During the scrutiny, inquiry, investigation or any other proceedings of a registered person, the Assistant Commissioner or any officer senior to him, having regard to the nature and complexity of the case and the interest of revenue, might be of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits.
In such cases, with the prior approval of the Commissioner, the Assistant Commissioner or any officer senior to him can direct he registered person in FORM GST ADT-03 to get his records including books of account examined and audited by a specified chartered accountant or a cost accountant.
The chartered accountant or a cost accountant will be nominated by the Commissioner. The chartered accountant or cost accountant so nominated has to submit a report of such audit within the period of ninety days, duly signed and certified by him to the Assistant Commissioner.
On an application made by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, the Assistant Commissioner can extend the said period by a further period of ninety days.
The provisions of special audit shall have effect even if the accounts of the registered person have been audited under any other provisions of the GST Act or any other law for the time being in force.
The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of special audit and which is proposed to be used in any proceedings against him under this Act or the rules made thereunder. The expenses of the examination and audit of records, including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner.
On conclusion of the special audit, the registered person shall be informed of the findings of the special audit in FORM GST ADT-04. Where the special audit results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the process of demand and recovery will be initiated against the registered person.
Assessments And Audit Under Gst Notes
- Sections involved: 59 to 66 of CGST Act.
- Types of Assessments:
a. Self-Assessment
b. Scrutiny of Returns
c. Assessment of Non-Filers of Returns
d. Assessment of Unregistered person
e. Summary Assessment in certain special cases
Note: Assessments of Non-Filers of Returns and Unregistered Persons is called as:
“Best Judgment Assessment”
- Types of Audit:
a. Audit by Tax Authorities
b. Special Audit
Note: Apart from the above Audits, students should be aware of Audit by Chartered Accountants/Cost Accountants which is mandatory based on turnover criteria as provided in CGST Rules.