GST Assessment ProcedureSelf-Assessment, Provisional, Scrutiny & Best Judgment
The GST assessment framework provides five distinct mechanisms for determining tax liability — from routine self-assessment in returns to officer-driven scrutiny, provisional assessment, and best judgment orders for non-compliant taxpayers.
Types of Assessment under GST
Self-Assessment (Section 59)
Every registered person self-assesses tax liability in each return. This is the default mechanism — taxpayer calculates output tax, claims ITC, and pays net liability without officer intervention.
Provisional Assessment (Section 60)
When taxpayer cannot determine value or rate at supply time, they request provisional assessment. Officer allows payment at provisional rate; final assessment done within 6 months (extendable). Difference refunded or recovered with interest.
Scrutiny Assessment (Section 61)
Officer scrutinizes returns to verify correctness. If discrepancies found, taxpayer given notice to explain within 30 days. If explanation unsatisfactory, officer may initiate Section 73/74 proceedings.
Best Judgment — Non-Filers (Section 62)
If taxpayer fails to file return despite notice under Section 46, officer assesses liability to the best of judgment. Assessment deemed withdrawn if return filed within 60 days (extended from 30 days).
Best Judgment — Unregistered (Section 63)
For persons who should have registered but didn't — officer assesses tax liability based on available information. Applies to non-compliant taxpayers evading registration threshold.
Summary Assessment (Section 64)
In cases requiring immediate revenue protection (perishable goods, absconding taxpayer), Additional/Joint Commissioner can pass summary assessment order. Taxpayer can request withdrawal within 30 days.
Assessment Timelines & Interest
| Assessment Type | Time Limit | Interest Applicable |
|---|---|---|
| Provisional Assessment | 6 months (extendable to max 4 years) | Yes — 18% p.a. on shortfall |
| Scrutiny Notice Response | 30 days from notice + 15 days extension | As per Section 50 if demand raised |
| Best Judgment (Sec 62) | 5 years from due date of annual return | Yes — 18% p.a. |
| Best Judgment (Sec 63) | 5 years from date of assessment order | Yes — plus penalty |
| Summary Assessment | Immediate; withdrawal within 30 days | As per normal provisions |
| Section 73 (Non-Fraud) | 3 years from due date of annual return | Yes — 18% p.a. |
| Section 74 (Fraud/Suppression) | 5 years from due date of annual return | 24% p.a. + 100% penalty |
Frequently Asked Questions
What is self-assessment in GST and how does it work?
Self-assessment (Section 59) is the default GST mechanism where every taxpayer calculates their own tax liability in each return (GSTR-1, GSTR-3B). The taxpayer determines output tax, claims eligible ITC, computes net liability, and pays accordingly. No officer intervention is required unless discrepancies are found during scrutiny or audit.
When is provisional assessment applicable?
Provisional assessment (Section 60) applies when a taxpayer genuinely cannot determine the taxable value or applicable rate at the time of supply — for example, when classification is disputed, valuation depends on future events, or inter-company pricing is being finalized. The taxpayer must execute a bond with security, and final assessment must be completed within 6 months (extendable up to 4 years).
What happens if I don't file GST returns — can best judgment assessment be passed?
Yes. Under Section 62, if you fail to file returns even after receiving notice under Section 46, the officer can assess your liability based on available information (best judgment). However, this assessment is automatically withdrawn if you file the pending return within 60 days of the assessment order. Interest and late fees still apply.
What is the difference between Section 73 and Section 74 proceedings?
Section 73 applies when tax is short-paid/not paid WITHOUT fraud or willful suppression — time limit is 3 years, interest at 18% p.a., and penalty is waived if tax + interest paid within 30 days of notice. Section 74 applies when fraud, suppression, or misstatement is involved — time limit is 5 years, interest at 24% p.a., and penalty is 100% of tax amount (reducible to 15-25% for early payment).
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