1. Assessment, Audit, Demand, Revision and Appeal
Rajesh Kumar T.R.
B’Com, LLB, FCA, DISA
Hiregange & Associates

2. Different aspects of Taxation
Levy – Defines the charge, applicability of tax- charging/levy Section.
Assessment – Quantification process of the applicable tax – covers
classification to identify rate of tax;
valuation to determine the value on which the tax rate has to be applied;
exemption to arrive at the actual tax payable after excluding relaxation given by Govt.
Collection – Process of collection by Government of assessed tax – covers
Payment of tax; audits, demands and recovery.
Hiregange & Associates

3. Different Aspects in GST
Assessment
Determination/Demand
Revision
Appeals
Recovery
Hiregange & Associates

4. Hiregange & Associates
Administration
“proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board;
State/UT officers are authorised to be proper officers as per notification issued;
PO issuing CGST order also to issue order under SGST/UTGST on intimation to them;
PO under ST/UT has initiated proceedings no proceedings from CGST;
Rectification, Appeal or revision of CGST to be before CGST only and similarly with state;
Hiregange & Associates

5. Hiregange & Associates
Assessment
Sec.2(11) -“assessment” means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment.
Different sections of CGST Act deal with different types of assessment
Hiregange & Associates

6. Self Assessment and Provisional Assessment
Sec. 59 – Self-assessment - Mandates – every regd. person to self assess the tax payable and furnish returns.
Sec. 60 – Provisional assessment – when Value or rate of tax is not ascertainable – Request in writing –proper officer to pass order <90 days – bond – final asst. < 6 Months (extension 6 months by JC/ADC; 4 yrs by Commr.) – payment of tax or refund with interest;
Hiregange & Associates

7. Hiregange & Associates
Scrutiny of Returns
Sec. 61 – Scrutiny of returns –
Proper Officer scrutinize the returns and related information furnished
Communication of discrepancy (ASMT-10)
Accept and pay with interest or reply (ASMT – 11),
found correct intimate in ASMT - 12
If not acted further proceedings –
65 – Audit by Authorities;
66 – Special Audit;
67 – Inspection, Search and Seizure;
73 or 74 – Determination of tax not paid, short paid etc.,
Hiregange & Associates

8. Best Judgement Assessment – Non-filers
Sec. 62 deals with this
This overrides Sec. 73 and 74
Applies when return is not filed u/s 39 (periodical) or 45 (final) in spite of notice
Best Judgement Order based on available or gathered material within 5 years from due date of annual returns.
If return is furnished within 30 days of service of order, the order is deemed to have withdrawn.
Interest and late fee applies.
Hiregange & Associates

9. Best Judgement Assessment – Unregistered
Sec. 63 deals with this
This overrides Sec. 73 and 74
Applies when
no registration is taken though liable
Cancellation of registration u/s 29(2) but liability exists
Best Judgement Order within 5 years from due date of annual returns.
Opportunity of hearing to be given.
Hiregange & Associates

10. Summary Assessment – Sec. 64
Applies - If proper officer has sufficient ground to believe that if the assessment is delayed, it will adversely affect the interest of revenue.
It has to be done with the previous permission of JC/ADC;
In cases of goods, where the actual person who is liable to pay is not ascertainable, the person who is incharge of goods will be deemed to be the person liable
If the taxable person makes application within 30 days of passing such order or suomoto, the JC/ADC considers if the order is errenous the same may be withdrawn and regular determination under Sec. 73 or 74 shall be proceeded.
Hiregange & Associates

11. Departmental Audit – Sec. 65
Audit is by commissioner or officer authorised by him
It may be general or specific order;
The period (Financial year or Multiples) and frequency not yet prescribed;
Notice of Audit(GST ADT-01) with minimum 15 days in advance
Intimate discrepancies – reply to be filed – finalisation of audit findings considering reply filed
Audit to be completed within 3 Months (extendable to 6 Months) from the commencement
Findings with reasons to be given in GST ADT-02 within 30 days alongwith his rights and obligations
Based on the audit findings the proper officer may initate action under Sec. 73 or 74.
Hiregange & Associates

12. Hiregange & Associates
Special Audit – Sec. 66
During any stage of scrutiny, inquiry, investigation or any other proceedings it can be invoked
By AC/DC and above in the case of valuation and ITC credit involving complexity with Commr. approval
Commissioner will nominate CA/Cost Accountant
Report to be submitted within 90 days (extend 90 days )
Applies even if it was audited under other law;
Findings are to be used against the registered person, opportunity of hearing to be given.
Remuneration is determined and paid by Commissioner
Based on the audit findings action under Sec. 73 or 74.
Hiregange & Associates

13. Demand, Revision and Appeals
Prior to Issue of Notice
Hiregange & Associates

14. Hiregange & Associates
Sources for demand
Findings in the Scrutiny;
Findings in the audit;
Enquiry;
Investigation;
Hiregange & Associates

15. Enquiry and Investigation – How they will come to know
Different Reports from GSTN
Data/Info from other Govt. departments
General issues in the trade
List from Associations
Audit of Customer/suppliers
Roving Enquiries/ fishing expeditions
Competitors
Complaints/ old employees
Hiregange & Associates

16. Modes of communication
Portal/ s
Telephonic Calls
Common letters asking for info.
Demand letters
Letters seeking the details of Regn. & Payment.
Summons
Hiregange & Associates

17. Hiregange & Associates
Evidence Gathering
Recording of Statement
Search & Seizure
Financial Statements
Agreements/Contracts
Correspondences with suppliers/customers
Summons to customers and statements from customers
Hiregange & Associates

18. Issue of Notice and Reply
Hiregange & Associates

19. Hiregange & Associates
Determination – 73, 74, 75 & 76
Before confirming the demand there is a process of determination of
Tax short paid or not paid
Tax erroneously refunded
Excess credit availed or utilised
Section 73, 74 and 75 essentially deal with it.
Sec. 73 – Cases without fraud, willful mis-statement or suppression of facts to evade tax.
Sec. 74 – Cases with fraud, willful mis-statement or suppression of facts to evade tax.
Sec. 75 – Manner of determination for above
Hiregange & Associates

20. Hiregange & Associates
Important Points
Due date to pass order is counted from the due date of filing annual returns/refund
In case of 73 – 3 years – Notice min. <3 Months
In case of 74 – 5 years - Notice min. <6 Months
Notice should also specify interest and penalty
Statement of demand for subsequent period
In cases of 73
where tax and interest is paid before issue of notice and intimated no notice – Penalty applies for self assessed tax & collected not paid
In case of shortfall notice can be issued
After Notice within 30 days paid also no penalty except in case of self assessed and collected and not paid
Penalty will be 10K or 10% whichever is high
Hiregange & Associates

21. Hiregange & Associates
Important Points
In cases of 74
where tax, interest and penalty of 15% of tax is paid before issue of notice and intimated no notice
In case of shortfall notice can be issued
After Notice within 30 days paid tax, interest and penalty of 25% of tax, proceedings concluded
If tax, interest and 50% of penalty paid within 30 days balance penalty will be waived.
If the notice is issued under 74 and found to be no intention to evade tax, provisions of 73 applies
Hearing should be granted if requested or adverse orders are contemplated
Hiregange & Associates

22. Hiregange & Associates
Important Points
No Adjournment beyond 3 times
Order should be speaking order and within the scope of the notice and cannot go beyond
Appellate Authorities modifies tax, the interest and penalties are accordingly modified.
Interest is automatic even if it is not specified.
If no orders are issued within 3 yrs/5 yrs, the proceedings is deemed to be concluded without confirmation of demand.
Any other proceedings in favour of assessee is appealed by the department, the period of appeal is excluded.
Tax self assessed in returns and interest not paid, liable for recovery without notice.
When penalty u/s 73 or 74 is imposed, no penalty on the same under any other provisions
Hiregange & Associates

23. Tax Collected but not paid – Sec. 76
Requires that every person collected any amount as GST from other person and had not paid to Govt. is required to pay whether it is towards supply taxable or not.
Empowers proper officer to issue notice for determination and subsequently determine such amount not paid.
Also required to pay interest u/s 50 as well as penalty as applicable.
Orders to be passed within 1 year from the issue of notice.
The amount paid is adjusted towards tax payable if any and if surplus to be refunded to the person from whom it was collected otherwise to be credited to consumer welfare fund.
Person who has borne incidence has to claim refund u/s 54
Hiregange & Associates

24. Hiregange & Associates
Reply to SCN
Ascertain the authority of the officer issuing the SCN
Check whether issued within time
Check whether issued under 73 or 74
If u/s 74 check whether proper reasons is given in the SCN to show that there was fraud, intent to evade or misstatement of facts
Hiregange & Associates

25. Hiregange & Associates
Reply to SCN
Whether the issue is due to industry practice and universally followed through out the industry.
Whether there are any conflicting judgements in the past
Whether there are any circular issued to clarify the doubt.
Whether the industry/Dept has made any representation to Govt. seeking clarification
Hiregange & Associates

26. Hiregange & Associates
Reply to SCN
Whether the facts of the case is properly understood in the SCN
Whether it is proved in SCN that there is a taxable services with proper evidences
Whether there is any issue of constitutionality in the matter
Hiregange & Associates

27. Hiregange & Associates
Reply to SCN
Whether the classification of goods / services is brought out correctly
Whether any other alternative classification
Whether there are any decided cases in the same or similar matters
Whether the Valuation is adopted properly
Hiregange & Associates

28. Hiregange & Associates
Reply to SCN
Whether the computation of tax is given in the SCN. Whether it is Correct
Whether Cum-tax benefit is given
Whether ITC can be claimed on the same
Whether the provisions invoked in SCN for demand of interest is proper
Hiregange & Associates

29. Hiregange & Associates
Reply to SCN
Whether the provisions invoked in SCN for demand of penalty is proper
Whether there is proper reasoning given in SCN to levy penalty
Whether the default in payment is due to technical lapse without intention to evade the payment of tax
Hiregange & Associates

30. Hiregange & Associates
Reply to SCN
Along with the reply to SCN provide all the relevant evidences in support of the grounds taken in the SCN.
If there are any certificates required to establish the facts, the same should be obtained and enclosed.
Copies of earlier correspondences may also be enclosed.
Specifically mention that noticee wish to be heard in person
In the covering letter take a proper acknowledgement which gives the details of the documents and evidences given.
Hiregange & Associates

31. Hiregange & Associates
Personal Hearing
After submission of written reply there will be personal hearing
During personal hearing if there is any additional points/case laws or evidences or certificates which were not adduced earlier has to be given.
During the personal hearing highlight the important points in addition to the reply already made. If required additional written submission can also be given.
Insist upon taking note of the documents and evidences newly given on record.
Hiregange & Associates

32. Hiregange & Associates
Revision & Appeals
Hiregange & Associates

33. Issue not involving place of supply
Adjudication
By AC or DC or Superintendent
By JC or ADC – No commissioner
First Appeal
Before ADC (Appeals)
Before Commr (Appeals)
Second Appeal
Appeal to State Tribunal against the First Appellate order or Revisionary order of Revisional Authority u/s 108
Third Appeal
Appeal against the order of State Tribunal lies before High Court
Fourth Appeal
Appeal against the order of High Court before Supreme Court
Hiregange & Associates

34. Issue involving place of supply
Adjudication
By AC or DC or Superintendent
By JC or ADC – No commissioner – Only review u/s 108
First Appeal
Before ADC (Appeals) – within 3 M / 6 M + 1 M
Before Commr (Appeals)
Second Appeal
Appeal to National Tribunal against the First Appellate order or Revisionary order of Revisional Authority - within 3M /6M+ 3M
Third Appeal
Appeal against the order of National Tribunal lies before Supreme Court
Hiregange & Associates

35. Hiregange & Associates
Pre-deposit
Pre-deposit is pre-condition for filing appeal
First Appellate Authority –
Admitted – Full tax along with interest and penalty
Remaining – 10% of tax
Second Appellate Authority-
Admitted – Full tax along with interest and penalty
Remaining – In addition to first appellate stage 20% of tax
On such payment balance amount is stayed for recovery
Hiregange & Associates

36. For any clarifications: rajesh@hiregange.com
Hiregange & Associates