GST Updates

Know Provision relating to Assessment in GST-Self Assessment and Scrutiny of Returns –Section 59 and 61 of CGST Act, 2017

Know Provision relating to Assessment in GST-Self Assessment and Scrutiny of Returns –Section 59 and 61 of CGST Act, 2017

 

  1. Self-Assessment

Section 59 provides that every registered person shall self-assess taxes payable under this Act and furnish a return for each tax period as specified under section 39.

 

  1. Scrutiny of Returns

Relevant Section-Section 61 of CGST Act, 2017 read with Rule 99 of CGST Rules, 2017

 Relevant Forms:

ASMT-10- Notice for intimating discrepancies in the return after scrutiny

ASMT-11- Reply to the notice issued under Section 61 intimating discrepancies in the return

ASMT-12-Order of acceptance of reply against the notice issued under section 61

 

  • Applicability of Section:

The provision grants power to the proper officer to scrutinize return and related particulars so as to verify correctness of the return filed by the registered person.

 

  • Process for Scrutiny of Returns and issue of Notice under ASMT-10

Return shall be scrutinized with reference to information available with the proper officer. In cases where proper officer notices any discrepancy, he may issue a notice to the registered person in Form GST ASMT-10 informing him of the discrepancy and seeking his explanations thereto. The proper officer should, where possible quantify the amount of tax, interest and any other amount payable in relation to such discrepancy.

 

  • Reply of Notice by the Registered person-ASMT-11

Registered person has to submit reply to the notice issued by the proper officer within thirty days of the date of service of notice or such further period as may be permitted by the proper officer.  The registered person can submit his reply to the proper officer in Form GST ASMT-11 and can either

a) Accept the discrepancy mentioned in the notice and pay tax, interest and any other amount arising from such discrepancy and take the corrective measure in his return for the month in which discrepancy is accepted or

b) submit an explanation to the discrepancy mentioned in the notice to the proper office.

 

  • Action by the Assessing Officer

Where information or explanation submitted by taxpayer is found to be acceptable by proper officer, he may inform the registered person in Form GST ASMT-12. In case, no satisfactory explanation is offered by registered person or registered person after accepting the discrepancy, has failed to take corrective measure in the return for the month in which the discrepancy is accepted, proper officer can initiate appropriate action. The action being initiated by the proper officer shall include

a) Action under section 65 or section 66 or section 67 of the Central Goods and Service Tax Act, 2017 or

b) Determination of tax and other dues under section 73 or section 74.

 

Reference to the Relevant Sections:

Section 65 pertains to Audit by Tax Authorities

Section 66 pertains to Special Audit

Section 67 pertains to Power of Inspection, search and seizure

Section 73 pertains to Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts.

Section 74 pertains to Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts.

 

  • Time Limit for Completion of proceedings under Section 61

Although no specific time limit has been given for completion of proceedings under Section 61 of CGST Act, 2017. However, rule 99 provides that registered person can accept discrepancy mentioned in the notice and pay tax, interest and any other amount arising from such discrepancy and take the corrective measure in his return for the month in which discrepancy is accepted.

Therefore, on one hand Section 61 requires the tax payer to take corrective measure in his return for the month in which discrepancy is accepted and on the other hand Section 39(9) only allows rectification of any omission or incorrect particulars upto the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier.

Thus, on harmonious reading proceedings of both the sections, it seems that notice under Section 61 for returns of a particular year should be issued before the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier. Suitable clarification is this regard may be welcome.

 

  • Whether Section 61 allows the proper office to asses and create demand against registered person

The question now arises is whether Section 61 allows proper officer to assess and raise demand against the registered person or only allows him to scrutinize the return and take appropriate action under section 65 or section 66 or section 67 of the Central Goods and Service Tax Act, 2017 or Determination of tax and other dues under section 73 or section 74.

It would be apt to highlight provisions under Section 62 and 63 grants power to the assessing officer to assess and upload the summary of demand in DRC-07. However, procedure under Section 61 only allows proper officer to issue Notice of discrepancy in ASMT-10, submission of reply by registered person in ASMT-11 and if reply found acceptable then information being sent to the registered person in ASMT-12. However, if reply is not found acceptable by proper officer; no action can be initiated under section 61 by the proper officer and appropriate action can only be initiated under section 65 or section 66 or section 67 of the Central Goods and Service Tax Act, 2017 or Determination of tax and other dues under section 73 or section 74.

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