Final Assessment of GST

The final assessment in GST (Goods and Services Tax) refers to the conclusive determination of tax liabilities of a taxpayer for a specific period. This is crucial for ensuring that all tax dues are accurately paid and that any discrepancies or underpayments are rectified. The final assessment process can be initiated either by the taxpayer themselves or by the tax authorities.

Self-Assessment

• Primary Mechanism:

Under GST, self-assessment is the primary mechanism through which taxpayers calculate their tax liabilities. Taxpayers must self-assess their taxes due and file their returns accordingly for each tax period.

• Regular Returns:

Through the filing of regular monthly or quarterly returns (GSTR-1, GSTR-3B), and annual returns (GSTR-9), taxpayers declare their output tax liabilities and claim input tax credits.

Scrutiny of Returns

The GST authorities may scrutinize the returns filed by taxpayers to verify the correctness of the information declared. If discrepancies are found, the taxpayer may be asked to provide explanations or rectify the returns.

Audit

• By Tax Authorities:

An audit can be conducted by the GST authorities to verify the accuracy of the tax paid and compliance with GST law. This could be based on risk parameters or on a random selection basis.

• Turnover Basis:

Taxpayers whose turnover exceeds a specified limit (as per GST laws, this limit was Rs. 2 crore for FY 2017-18 and 2018-19) must get their accounts audited by a chartered accountant or a cost accountant and submit the audit report in form GSTR-9C along with the annual return.

Assessment by Tax Authorities

• Provisional Assessment:

If taxpayers are unable to determine the value of goods or services or the applicable tax rate, they can request a provisional assessment from the GST authorities.

• Summary Assessment:

In cases where there is evidence of tax liability to protect the revenue interest, a summary assessment can be initiated by the authorities without giving notice to the taxpayer.

• Best Judgment Assessment:

If a taxpayer fails to file returns, the GST authorities may proceed to assess the tax liability to the best of their judgment based on available information.

Finalization

• The process concludes with the final assessment, where any adjustments required are made based on audit findings, scrutiny outcomes, or additional information provided by the taxpayer.
• The taxpayer must pay any additional tax determined as due along with applicable interest and penalties. Conversely, if it’s found that excess tax has been paid, the taxpayer is eligible for a refund.

Appeals

Taxpayers have the right to appeal against assessment orders if they disagree with the final assessment made by the tax authorities. Appeals must be filed within a specified period from the date of receipt of the assessment order.