In the new tax regime if you are filling GST return in incorrect manner or suppression of fact or supply details then in such cases Proper officer can made assessment base on information and data available with department. This assessment also called Best Judgement Assessments.

There are 2 parts of best judgement assessment:

  • Assessment of non-filers: Any registered person who is liable to file return but fails to do so will falls under this category.
  • Assessment of unregistered persons: Any person who is liable to register under GST but fails to do so will falls under this category.

“Assessment” means the process of determining the tax liability under GST Act, 2017. It includes various type of assessment like:

  • Self-assessment
  • Re-assessment
  • Provisional assessment
  • Summary assessment
  • Best judgment assessment

Section 62 : Assessment of non-filers of returns ( Best Judgement Assessments )

  • Notwithstanding anything to the contrary contained in section 73 or section 74,where a registered taxable person

      -fails to furnish the return required under Section 39 ( Monthly or Qtrly ) or

    -The final return in case a person who was liable to file the return but has applied for cancellation of his registration

– a notice under Section 46 has been issued by the proper officer to assess to furnish the return within 15 days

The PO may assess tax liability of the said person to the best of his judgement taking into account all the relevant material which is available or which he has gathered and issue an assessment order within the period of 5 years limit from the date specified of Section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.

Eg: if Mr.x not filling return for FY 2017-18 then Due date of Final return GSTR-10 is 31/12/2018 so best judgement can be done by PO within 31/03/2023 ( 5 years from GSTR-9) 

  • Where the registered person furnishes

-a valid return within 30 days of the service of the assessment order under sub-Section (1),

    -the said assessment order shall be deemed to have been withdrawn.

 But the liability for payment of interest under subsection (1) of section 50 or for the payment of late fee under section 47 shall continue.

 BUT when Person is unregistered then order under best judgement cannot withdrawn and deemed that there is no such order passed.

Section 73 and 74 mandates issue of SCN and providing opportunity of being heard before passing order demanding tax. Further tax can be demand for a period of five years only if the existence of omissions and commissions mentioned u/s 74 are proved. The pre-condition of issuing SCN, providing opportunity of being heard and demanding tax for a five year period only in the presence of omissions and commissions listed u/s 74 is sought to be overcome by the non-obstante clause u/s 62.Consequence of late fee under Section 47 and interest under

Section 50 will both be applicable in cases of conclusion of best judgement assessment made under this Section.

An order passed under this section shall be communicated to the registered person in FORM GST ASMT 13

 

Section 63 : Assessment of unregistered persons

 

Notwithstanding anything to the contrary contained in section 73 or section 74,

– where 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

 

(a) A person who contravenes the provisions of this Act or Rules made thereunder;

(b) A composition person who fails to furnish returns for 3 consecutive tax periods.

(c) A person other than composition person who fails to furnish returns for 6 consecutive months.

(d) A person who has sought voluntary registration but has failed to commence business within 6 months.

(e) Where registration has been obtained by way of fraud, willful misstatement or suppression of facts.

 

-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

And

issue an assessment order within a period of 5 years from the date specified under section 44 for furnishing of the annual return (GSTR-9) for the financial year to which the tax not paid relates.

 

Provided that no such assessment order shall be passed without giving the person an opportunity of being heard

 

BUT when Person is unregistered then order under best judgement cannot withdrawn even after filing valid return.

For assessment under this section, notice has to be issued as per Rule 100(2) in FORM GST ASMT-14 by the proper officer.

 After considering the said explanation if any, the order has to be passed in FORM GST ASMT- 15.

 

Summary of Best Judgement Assessment

Non-filers

Unregistered persons

1.    A registered taxable person liable to file return fails to do so.( Return )

2.    The proper officer issues a notice to him u/s 46

3.    The proper officer waits for 15 days from the date of issue of notice

4.    After the expiry of above-mentioned period, the officer may conduct best judgement assessment

1.    A taxable person liable to register, fails to do so

2.    The proper officer may choose to conduct assessment

3.    The officer issues an assessment order within a period of five years from the due date for filing of the annual return for the year to which the tax not paid relates.

 

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Yogesh Parmar have vast knowledge in the field of Goods and Services Tax (GST). He is regularly conducting seminars on GST at various location for business personal to provide the knowledge about impact of GST on their business and how compliance should be made. He is founder of "www.etaxupdates.com" through which he is sharing his knowledge and latest amendments, circulars, notifications etc related to all type of taxes. He is also associated with some software development companies and providing advisory service and help to understand technical aspect of GST. He is also serving as functional manager as well as tester to those company which is developing software for GST.

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