Section 60: Provisional Assessment, and Why It Is Rarely Used

Section 60 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

A supplier genuinely cannot determine the value or the rate. It must still file a return and pay something. Section 60 lets it pay provisionally and settle later — with a bond, a security and interest.

Section 60(1): where the taxable person is unable to determine the value of goods or services, or the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on a provisional basis, and the officer shall pass an order within ninety days allowing payment of tax provisionally at such rate or on such value as may be specified by him. Section 60(2): the payment is allowed subject to execution of a bond with such surety or security as the officer deems fit, binding the person to pay the difference. Section 60(3): the officer shall pass the final assessment order within six months, extendable.

The two grounds

Unable to determine the value. Where the transaction value is genuinely unascertainable — a related-party supply without a comparable, a supply with non-monetary consideration whose money equivalent is not yet known, a price subject to a formula that resolves later.

Unable to determine the rate. A genuine classification difficulty where the HSN entry is arguable.

Note what is not a ground: uncertainty about whether a supply is taxable at all, or about the place of supply. Section 60 addresses value and rate, not the levy or the jurisdiction.

The procedure

Rule 98(1) — the request is in FORM GST ASMT-01, electronically, along with the documents in support.

Rule 98(2) — the officer may issue a notice in FORM GST ASMT-02 requiring additional information or documents, and the applicant files a reply in FORM GST ASMT-03 and may appear in person.

Rule 98(3) — the officer issues an order in FORM GST ASMT-04 allowing payment on a provisional basis, indicating the value or the rate on the basis of which the assessment is to be allowed on a provisional basis, and the amount for which the bond is to be executed and the security to be furnished, not exceeding twenty-five per cent of the amount covered under the bond.

Rule 98(4) — the applicant executes a bond in FORM GST ASMT-05 along with a security in the form of a bank guarantee for an amount as determined.

Rule 98(5) — the officer issues a notice in FORM GST ASMT-06 calling for information and records required for finalisation, and passes the final assessment order in FORM GST ASMT-07 within six months.

Rule 98(6) — the applicant may file an application in FORM GST ASMT-08 for release of the security after the final order.

Rule 98(7) — the officer shall release the security after ensuring that the amount payable per the final order has been paid, and issue an order in FORM GST ASMT-09 within seven working days.

The six months, and the extensions

Section 60(3) proviso: the six-month period may, on sufficient cause being shown and for reasons to be recorded in writing, 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 years.

So the outer limit is six months + six months + four years = five years.

That is a long time to have a bond and a bank guarantee outstanding, and it is one of the two reasons the provision is rarely used.

Interest, both ways

Section 60(4): the registered person shall be liable to pay interest on any tax payable on the supply but not paid on the due date specified under s.39(7) or the rules made thereunder, at the rate specified under s.50(1), from the first day after the due date of payment of tax in respect of the said supply of goods or services till the date of actual payment, whether such amount is paid before or after the issuance of the order for final assessment.

Section 60(5): where the registered person is entitled to a refund consequent to the order of final assessment, interest shall be paid on such refund as provided in s.56.

So the taxpayer bears 18% on a shortfall from the original due date — the provisional assessment does not stop interest running — and receives 6% on an excess, only after sixty days from the refund application.

That asymmetry is the second reason the provision is rarely used. Provisional assessment does not buy time on interest; it only defers the determination.

The practical alternative

Most taxpayers facing genuine uncertainty do not use s.60. They:

• pay at the higher rate or value, and claim a refund later if the position is resolved favourably; or
• seek an advance ruling under s.97(2)(a) or (b) — classification, or applicability of a notification — which is binding on the applicant and the jurisdictional officer, and costs nothing but time; or
• take a documented position and defend it if questioned.

The advance ruling route is generally better where the question is one of rate or classification, because it produces a binding answer without a bond, a bank guarantee or five years of exposure.

Section 60 remains useful where the question is one of value that will genuinely resolve on a future event — a price adjustment mechanism, a formula-linked consideration — because an advance ruling cannot decide a fact that has not yet happened.

Key takeaways

• s.60 applies where the person cannot determine the value or the rate — not the levy or the place of supply.
• ASMT-01 request; ASMT-04 provisional order within ninety days; ASMT-05 bond with security up to 25% of the bond amount.
• Final order in ASMT-07 within six months, extendable to a maximum of five years.
• Interest at 18% runs from the original due date on any shortfall, regardless of the provisional order.
• Refund of an excess carries s.56 interest only after sixty days from application.
• An advance ruling is usually the better route for a rate or classification question.

Read next

• Section 59: Self-Assessment Is the Whole Architecture
• Assessment Under GST: Self, Provisional and Best Judgment
• Advance Ruling Under GST: How to Apply
• Section 56: Interest on Delayed Refunds

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).