Assessment, Provisional

Assessment & Audit

Arun Kumar Mishra,

Joint Secretary,
CTD, Bihar.

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 Assessment
Assessment is the statutorily required recording of
the tax liability (Section 6203 of Revenue and Taxation Code,
IRS, USA)
Assessment is the final determination of tax liability
Defined as determination of tax liability under this Act
{Section 2(12)}
Self assessment (Section 44) is the default rule under GST
Scrutiny of Returns (Section 45)
Other modes of assessment under GST:
Provisional Assessment (Section 44A)
Assessment of non-filer (Section 46)
Assessment of un-registered persons (Section 47)
Summary Assessment (Section 48)
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 Assessment
Based on manner and circumstances,
following kinds of assessments:-
Self assessment
Summary assessment
Regular assessment
Provisional assessment
Best judgment assessment
Protective assessment

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 Self Assessment
Taxes due during any tax period to be
assessed by concerned registered taxable
person and
such person to file a return under Section 27
filing of return prescribed by Section 27 implies
self assessment.
In case of goods returned within 6 months
of receipt, amount of ITC availed earlier in
respect of such receipt to be included in self
assessed return.
[Explanation to Section 44]

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 Provisional Assessment
If taxable person unable to determine
The value of goods and/or services or
The applicable rate of tax
Upon furnishing of bond with security/surety, the proper officer may
permit payment of tax provisionally at rate or value specified in order
[Section 44A(1) & (2)]
Final order to be passed within six months ( extendible by Additional/Joint
Commissioner by 6 months and by Commissioner beyond six months )
[Section 44A(3) ]
If amount paid provisionally < amount determined finally, interest to be
paid [Section
44A(4)]
If amount paid provisionally > amount determined finally, excess to be
refunded if
It relates to exports/inputs for exports, except in case of goods subject to export
duty
It has accumulated as ITC on account of inverted duty structure
Interest as per section 39 to be paid on such refund [Section 44A(5)]
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 Scrutiny of Returns
Every return to be scrutinized
in accordance with pre-defined parameters to
verify correctness thereof [Section 45(1)]
Discrepancies
to be communicated in manner prescribed
if explained satisfactorily, to be informed and no further action to be
taken [Section 45(2) &
(3)]
If no satisfactory explanation furnished within 30 days or tax
not paid after accepting discrepancy then proper officer may
initiate-
Tax audit, or
Special audit, or
Inspection, search and seizure, or
Adjudication for recovery
[Section 45(4)]
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 Assessment of
Non-filer
If a registered taxable person does not furnish
the monthly/quarterly or
final return
within 15 days of service of notice then
proper officer may pass a best judgment assessment order
within
5 years of due date of annual return, in case there is evidence of any
fraud, or
3 years of due date of annual return, in any other case
If valid return furnished within 30 days of service of
such order then the order deemed to have been
withdrawn
Interest or late fee, as applicable, to be paid.
[Section 46]
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 Assessment of

Un-registered Person
If a person liable to be registered in terms of
Schedule III does not obtain registration
Proper officer may pass a best judgment
assessment order within 5 years of due date
of annual return
Such order to be passed only after granting
reasonable opportunity of being heard to said
person
[Section 47]
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 Summary Assessment

If proper officer has

evidence of any tax liability of a person and
reason to believe that delay in assessment will adversely affect interest of revenue
Such officer, to protect interest of revenue, may pass an assessment
order
The order to be passed only with prior sanction of Additional/Joint
Commissioner
If, in case of goods, person chargeable with tax not ascertainable then
person in charge of goods shall be deemed to be such person
If
upon application within 30 days of receipt of order, or
suo moto
order considered erroneous by Additional/Joint Commissioner then
such order may be withdrawn and Section 51 to apply
[Section 48]

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 Departmental Audit
Audit is detailed examination of records, returns and other
documents to
verify correctness of the contents relating to
turnover, claims, taxes
assess level of compliance
Commissioner/Authorized Officer, by general/specific order
direct audit of taxable person
for prescribed period and frequency
Tax payers to be selected for audit on the basis of risk analysis
Risk scores and risk profiling to be done
Some selection criteria:
Total tax/tax throughput
Refund claim
Export/zero rating
History of delinquency
Unusual deviations from norms/standards
[Sections 49(1) & (2)] 10
 Departmental Audit
Auditee to be informed by notice at-least 15 days in
advance
Audit to be preceded by compilation and collation of
Records/documents relating to auditee
Records/documents relating to industry norms/standards
Questionnaire
Checklist
Desk/Field audit to be conducted
in transparent manner in accordance with manual/SOP
within 3 months of commencement, extendable by
Commissioner by maximum 6 months
commencement is the earlier of the date
on which is records are furnished, or
institution of audit at place of business [Section 49(3) &
(4)]
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 Departmental Audit
Auditee to provide facility to verify records and furnish
information required by audit authority
Audit authority to
verify and examine records and responses
carry out cross verification from external sources
assess evidence
Upon conclusion, proper officer to communicate to
auditee
findings of audit and reasons there for
rights and obligations of auditee
Proceedings u/s 51 to be initiated if audit reveals
detection of tax not paid/short paid or
ITC erroneously availed or
tax erroneously refunded
[Section 49(6) & (7)] 12
 Special Audit
Special audit is an audit of records on specific issues and
originates from Section 233A of Companies Act, 1956
If any officer not below rank of Deputy/Assistant Commissioner
during any
scrutiny
enquiry
investigation or
any other proceeding
is of the view that
value has been incorrectly declared or
credit availed is not within normal limits
then he may, by written notice, direct audit/examination of
accounts and record by such Chartered or Cost Accountant
nominated by Commissioner
Such audit can be directed only with prior approval of
Commissioner [Section 50(1)] 13
 Special Audit

The auditor to furnish audit report within 90 days

to officers ordering such audit
The 90 days period may be extended, by a further
90 days, by the proper officer
on application made by
the auditee or
the auditor or
for any material and sufficient result
Special audit, if ordered, to be in addition to any
other statutory audit
Expenses of such audit to be determined and
borne by Commissioner
[Section 50 (2) to14(4)]
 Special Audit
Proceedings u/s 51 to be initiated if audit
reveals
detection of tax not paid/short paid or
ITC erroneously availed or
tax erroneously refunded
Auditee to be afforded opportunity of hearing
if findings of special audit are to be used in
any proceeding against him
[Section 50 (5) & (6)]

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 SGS
Value CGST T
Goods sold by A to B on
01.08.16 1000 100 110
ITC taken by B in respect of
August 2016 100 110
Goods returned by B to A on
15.01.17 500 50 55
Amount to be added by B in
respect of January 2017 50 55

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THANK YOU

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