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February 12, 2020
Provisional Assessment in GST
GOODS AND SERVICES TAX
National Academy of Customs, Indirect Taxes & Narcotics
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Directorate General of Taxpayer Services
CENTRAL BOARD OF EXCISE & CUSTOMS
Assessment in GST
A supplier will come to know the extent of his tax liability which
has to be discharged on a continuous and regular basis only after
assessment. Assessment means determination of tax liability and
includes self-assessment, re-assessment, provisional assessment,
summary assessment and best judgment assessment. The major
determinants of the tax liability are generally the applicable tax rate
and the value. There might be situations when these determinants
might not be readily ascertainable and may be subject to the
outcome of a process that requires deliberation and time. Hence
like under the previous laws, when due to various circumstances it
might not be always possible, at that point of time, to carry out an
assessment and determine the exact duty liability, the GST law also
provides for provisional assessment.
The Asst. 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. On finalization of the
provisional assessment, any amount that has been paid on the basis
of such assessment is to be adjusted against the amount that has
been finally determined as payable.In case of short payment, the
same has to be paid with interest and incase of excess payment, the
same will be refunded with interest.
In case a supplier is unable to determine the value of goods or
services or both or to determine the rate of tax applicable thereto,
he can request the Asst. Commissioner/Dy. Commissioner of Central
Tax in writing, giving reasons for payment of tax on aprovisional
basis. The supplier requesting for payment of tax on a provisional
basis has to furnish an application along with the documents in
support of his request, electronically in FORM GST ASMT-01 on
the common portal, either directly or through a Facilitation Centre
notified by the Commissioner.
The Asst. Commissioner/Dy. Commissioner of Central Tax will
scrutinize the application in FORM GST ASMT-01. In case, additional
information or documents in support is required by the Asst.
Commissioner/Dy. Commissioner of Central Tax to decide the
case, notice in FORM GST ASMT-02 will be issued to the supplier
requesting for submission of the same.
The supplier has to file a reply to the notice in FORM GST ASMT
– 03, and if he desires can also appear in person before the Asst.
Commissioner/Dy. Commissioner of Central Tax to explain his case.
The Asst. Commissioner/Dy. Commissioner of Central Tax will then
issue an order in FORM GST ASMT-04 within a period not later than
ninety days from the date of receipt of the request, allowing the
payment of tax on a provisional basis.The order will indicate the
value or the rate or both on the basis of which the assessment is
to be allowed on a provisional basis and the amount (this amount
shall include the amount of integrated tax, central tax, State tax or
Union territory tax and cess payable in respect of the transaction)
for which the bond is tobe executed along with the security to be
furnished. The security will not exceed twenty-five percent of the
amount covered under the bond.
The supplier has to execute the bond in FORM GST ASMT-05 along
with a security in the form of a bank guarantee for an amount as
mentioned in FORM GST ASMT-04.A bond furnished to the proper
officer under the State Goods and Services Tax Act or Integrated
Goods and Services Tax Act shall be deemed to be a bond furnished
under Central Goods and Services Tax Act.
On executing the bond the process of the provisional assessment is
complete and the supplier can supply the goods or services or both
and pay the tax at the rate or on the value that has been indicated in
the order in FORM GST ASMT-04.
Finalization of provisional assessment
The provisional assessment will be finalized, within a period not
exceeding six months from the date of issuance of FORM GST
ASMT-04. The Asst. Commissioner/Dy. Commissioner of Central Tax
will issue a notice in FORM GST ASMT-06, calling for information and
records required for finalization of assessment and shall issue a final
assessment order, specifying the amount payable by the registered
person or the amount refundable, if any, in FORM GST ASMT-07.
On sufficient cause being shown and for reasons to be recorded
in writing, the time limit for finalization of provisional assessment
can be, extended by the Joint Commissioner or Additional
Commissioner for a further period not exceeding six months and
by the Commissioner for such further period not exceeding four
In case any tax amount becomes payable subsequent to finalization
of the provisional assessment, then interest at the specified rate
will also be payable by the supplier from the first day after the due
date of payment of the tax till the date of actual payment, whether
such amount is paid before or after the issuance of order for final
In case any tax amount becomes refundable subsequent to
finalization of the provisional assessment, then interest (subject
to the eligibility of refund and absence of unjust enrichment) at
the specified rate will be payable to the supplier.
Release of Security consequent to Finalization
Once the order in FORM GST ASMT-07 is issued, the supplier
has to file an application in FORM GST ASMT- 08 for the release
of the security furnished. On receipt of this application the Asst.
Commissioner/Dy. Commissioner of Central Tax will issue an order
in FORM GST ASMT–09 within a period of seven working days from
the date of the receipt of the application, releasing the security
after the amount payable if any as specified in FORM GST ASMT-07
has been paid.
Provisional assessment provides a method for determining the
tax liability in case the correct tax liability cannot be determined
at the time of supply. The payment of provisional tax is allowed
only against a bond and security. The provisional assessment has
to be finalized within six months unless extended. On finalization,
the tax liability can either be more or less as compared to the
provisionally paid tax. In case of increase in the tax liability, the
difference is payable along with interest and in case of decrease in
the tax liability the amount will be refunded with interest.
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