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Assessment of Non-Filers of Returns and Unregistered Persons

Assessment of Non-Filers of Returns

Where a registered person –

  • Fails to furnish the GSTR-1/3 (Monthly/Quarterly) or GSTR-10 and,
  • A notice issued under section 46 has been issued by proper officer to the defaulting taxable person requiring him to furnish the return within a period of 15 days and taxable person fails to file return within the given time.

the proper officer may proceed to assess the tax liability of that person to the best of his judgement taking into account all the relevant material which is available or which he has gathered.  The order of best judgement assessment shall be issued by the proper officer in the FORM GST ASMT-13 and summary of thereof shall be uploaded electronically in FORM GST DRC-07.

Time limit for assessment order:

The assessment order shall be issued by the Proper Officer within the period of 5 years form the date filing of GSTR-9 for the financial year to which the tax not paid relates.

For example:  If Mr. Arun defaults in filing of return for any tax period falling in FY 2018-19, period of 5 Years shall be reckoned from the date of filing of Annual Return for the FY 2018-19 i.e. 31.12.2019. Accordingly, best Judgement assessment can be made by the proper officer on or before 31.12.2024.

Withdrawal of Assessment Order:

Where the registered person furnishes a valid return within thirty days of the service of the assessment order, the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest shall continue.

Assessment of Unregistered Persons

Where a registered person –

  • Fails to obtain registration even though liable to do so or,
  • Whose Registration has been cancelled for any of the following reasons.
    • A registered person has contravened the provisions of the law
    • A person registered under composition scheme has not furnished returns for 3 consecutive tax periods
    • A registered person other that composition scheme has not furnished returns for 6 consecutive tax months
    • Any person who has taken voluntary registration has not commenced business within six months from the date of registration.
    • Registration has been obtained by means 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 said unregistered person to the best of his judgement for the relevant tax periods.

Issue of Notice:

Before making the assessment proper officer shall issue a notice in FORM GST ASMT-14 to a taxable person containing the grounds on which the assessment is proposed to be made on best judgement basis and shall also serve a summary thereof electronically in the FORM GST DRC-01. The taxable person shall be given 15 days time to furnish his reply to the proper officer. After that an order shall be passed in FORM GST ASMT-15 and summary thereof shall be uploaded  electronically in the FORM GST DRC-07.

However, no such order shall be passed without giving the person an opportunity of being heard.

Time limit for assessment order:

The assessment order shall be issued by the Proper Officer within the period of 5 years form the date filing of GSTR-9 for the financial year to which the tax not paid relates.

For example:  If Mr. Arun defaults in filing of return for any tax period falling in FY 2018-19, period of 5 Years shall be reckoned from the date of filing of Annual Return for the FY 2018-19 i.e. 31.12.2019. Accordingly, best Judgement assessment can be made by the proper officer on or before 31.12.2024.

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TaxClue Teamhttp://taxclue.in
Taxclue is an online news portal for reporting all news, articles, judgments, Circulars, orders, and notifications relating to various corporate and tax laws in India. We use the tagline ‘Simplifying Laws’. Our mission is to Simplify the Laws and make people aware of their rights and duties in relation to tax matters in order to equip them to participate in nation-building.

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