Provisional Assessment under GST is carried out in cases where a Taxable Person is unable to determine his Value of Supplies or Rate of Tax applicable thereto. In such case tax liability is discharged on provisional basis subject to finalization of assessment by the department. Once assessment is finalized, the taxable person becomes liable to pay the difference or, as the case may be, gets entitled for refund. Concept of provisional assessment was present in the Earlier Indirect Tax Regime (i.e. Pre-GST Regime) as well.
(1) Payment of Tax Liability under GST on Provisional Basis [Section 60(1)]
Subject to the provisions of sub-section (2). where the taxable person is unable to determine the ‘value of goods or services or both or determine 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 proper officer shall pass an order, within a period not later than ninety days from the date of receipt of such request, allowing payment of tax on provisional basis at such rate or on such value as may be specified by him .
(2) Execution of Bond with Surety or Security under GST [Section 60(2)]
The payment of tax on provisional basis may he allowed, if the taxable person executes a bond in such form as may be prescribed, and with such surety or security as the proper officer may deem fit., binding the taxable person for payment of the difference between the amount of tax as may be finally assessed and the amount of tax provisionally Assessed.
(3) Finalization of Provisional Assessment under GST [Section 60(3)]
The proper officer shall, within a period not exceeding six months from the date of the communication of the order issued under sub-section (1), pass the final assessment order after taking into account such information as may be required for finalizing the assessment.
Provided that the period specified in this sub-section may, on sufficient cause being shown and for reasons to he recorded in writing, be extended by the Joint Commissioner or Additional Commissioner for a further period not exceeding six months and by the Commissioner tor such further period not exceeding four years.
(4) Liability to Pay Interest under Provisional Assessment of GST [Section 60(4)]
The registered person shall be liable to pay interest on any tax payable on the supply of goods or services or both under provisional assessment hut not paid on the due date specified under sub-section (7) of section 39 or the rules made thereunder, at the rate specified under sub-section(l) of section 50, from the first day after the due date of payment of tax in respect of the said supply of goods or services or both till the date of actual payment, whether such amount is paid before or after the issuance of order for final assessment.
(5) Interest on Refund Consequent to Finalization of Provisional Assessment [Section 60(5)]
Where the registered person is entitled to a refund consequent to the order of final assessment under sub-section (3), subject to the provisions of sub-section (8) of section 54, interest shall be paid on such refund as provided in section 56