GST

Unit – IV (Complete Notes)

Assessment under GST
Assessment means determination of tax liability under GST law. The following are the various
kinds of assessments under GST.
Types of Assessment under GST
 Self-assessment
 Provisional assessment
 Scrutiny assessment
 Best judgment assessment
 Assessment of non-filers of returns
 Assessment of unregistered persons
 Summary assessment

Self-Assessment
Every registered taxable person shall themselves assess their taxes payable and furnish a return
for each tax period. The GST law operates similar to the Excise, VAT and Service Tax laws and
continues to promote self-assessment.

1|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Provisional Assessment
An assessee can request the officer for provisional assessment if he is unable to determine value
or rate. Unable to determine value due to difficulty in :-

 Calculating the transaction value

 Understanding whether certain receipts should be included or not
Unable to determine rate of tax due to difficulty in :-

 Classifying the goods/services

 Identifying whether any notification is applicable or not
Provisions of Provisional Assessment
 Requests for provisional assessments will be given in writing
 The proper officer can allow paying tax on a provisional basis, at a rate or on a value
specified by him.
 Order will be passed within 90 days from date of request.
 The taxable person has to issue a bond with a security promising to pay the difference
between provisionally assessed tax and final assessed tax.
 Provisional assessments will be followed by final assessments. The proper officer can ask
for information before the final assessment.
Time Limit for Final Assessments
The final assessment will be done within 6 months of the provisional assessment. This can be
extended by a further 6 months by the Joint/Additional Commissioner. However, the
Commissioner can extend it for further 4 years as they deem fit.
Interest on Additional Tax Payable and Refunds
The taxpayer will have to pay interest on any tax payable under provisional assessment which
was not paid within the due date. The interest period will be calculated from the day when tax
was first due on the goods/services (and not the date of provisional assessment) till the actual
payment date, irrespective of payment being before or after final assessment. Rate of interest will
be maximum 18%. If the tax as per final assessment is less than provisional assessment then the
taxable person will get a refund. He will also get interest on refund. Rate of interest will be
maximum 6%.
Scrutiny of Returns
Under scrutiny, the proper officer may scrutinise a return to verify its correctness. If any
discrepancies are observed, then the officer may ask for an explanation.

2|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

When Explanation is Satisfactory
If the officer finds the explanation satisfactory then the taxable person will be informed and no
further action will be taken.
When Explanation is not Satisfactory
The proper officer will take action

 If the taxable person does not give a satisfactory explanation within 30 days Or
 He does not rectify the discrepancies within a reasonable time (not yet prescribed)
The officer may-

 Conduct audit of the tax payer u/s 65

 Start Special Audit procedure u/s 66
 Inspect and search the places of business of the tax payer
 Initiate demand and recovery provisions
Best Judgement Assessment
In the case of best judgement assessment, an assessing officer assesses based on their reasoning
and using the information available. The assessment will be made without any having any bias.
Under GST, best judgement assessment becomes applicable in 2 situations-
 When a taxable person has not filed their return
 When a person has not registered under GST even though they are liable to

Accounts and Records Under GST

Every taxpayer registered under GST must maintain all records at his principal place of business.
Who must maintain accounts under GST
 It is the responsibility of the following persons to maintain specified records-
 The owner
 Operator of warehouse or godown or any other place used for storage of goods
 Every transporter
 Every registered person whose turnover during a financial year exceeds the prescribed
limit (2 crore) will get his accounts audited by a chartered accountant or a cost
accountant.

3|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

What records must be maintained under GST
Every registered person must maintain records of:

 Production or manufacture of goods

 Inward and outward supply of goods or services or both
 Stock of goods
 Input tax credit availed
 Output tax payable and paid and
 Other particulars as may be prescribed
What are the accounts which must be maintained under GST
 Input CGST a/c
 Output CGST a/c
 Input SGST a/c
 Output SGST a/c
 Input IGST a/c
 Output IGST a/c
 Electronic Cash Ledger (to be maintained on Government GST portal to pay GST)
Accounting entries under GST
In spite of initial transition challenges, GST will bring in clarity in many areas of business
including accounting and bookkeeping. While the number of accounts is more apparently under
GST, once you go through the accounting entries you will find it is much easier for record
keeping. One of the biggest advantages a trader will have is that he can set off his input tax on
service with his output tax on the sale.
Electronic Cash and Credit Ledger
Every registered taxpayer will have 3 ledgers under GST which will be generated automatically
at the time of registration and will be maintained electronically.
 Electronic Cash Ledger- This ledger will serve as an electronic wallet. The taxpayer
will have to deposit money into his cash ledger (add money to the wallet). The money
will be utilized to make the payment.
 Electronic Credit Ledger- The input tax credit on purchases will be reflected here under
three categories i.e IGST, CGST & SGST. The taxpayer will be able to utilize the balance
shown in this account only for payment of tax (not for interest, penalty etc.)
 E-Liability Ledger: This ledger will show the total tax liability of a taxpayer after
netting off for the particular month. This ledger will be auto-populated.

4|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Period for Retention of Accounts under GST
As per the GST Act, every registered taxable person must maintain the accounts books and
records for at least 72 months (6 years). The period will be counted from the last date of filing of
Annual Return for that year.
The last date of filing the Annual return is 31st December of the following year.
For example:
For the year 2017-2018, the due date of filing the annual return is 31.12.2018. The books &
records of 2017-2018 must be maintained for 6 years, i.e., 31.12.2023
If the taxpayer is a part of any proceedings before any authority (First Appellate) or is under
investigation then he must maintain the books for 1 year after the order of such
proceedings/appeal has been passed.

Consequences of Not Maintaining Proper Records

If the taxpayer fails to maintain proper records in respect of goods/services, then the proper
officer shall treat such unaccounted goods/services as if the taxpayer had supplied them. The
officer will determine the tax liability on such unaccounted goods.
The taxable person will be required to pay the tax liability calculated along with penalty.
GST invoice
An invoice or a GST bill is a list of goods sent or services provided, along with the amount due
for payment.
Who should issue GST Invoice
If you are a GST registered business, you need to provide GST compliant invoices for sale of
good and/or services. Also, you should receive GST invoices from your vendors to claim the
Input Tax credit (ITC).
What are the mandatory fields a GST Invoice should have
A tax invoice is generally issued to charge the tax and pass on the ITC. A GST Invoice must
have the following mandatory fields-
1. Invoice number
2. Invoice date
3. Customer name
4. Shipping and billing address
5. Customer and taxpayer’s GSTIN (if registered)**
5|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi
 6. Place of supply
7. HSN code/ SAC code
8. Item details i.e. description, quantity (number), unit (meter, kg etc.)
9. Total value
10. Taxable value and discounts
11. GST rate and amount of taxes i.e. CGST/ SGST/ IGST
12. Whether GST is payable on reverse charge basis
13. Signature of the supplier
**If the recipient is not registered AND the value is more than Rs. 50,000 then the invoice
should carry:
Name and address of the recipient
Address of delivery
State name and state code
Here is a sample invoice for reference: -

6|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 Audit
An audit is a type of investigation of existing reports, statements or business as a whole.
Individuals and companies hire an auditor to examine the financial reports of an entity,
accounting statements, management reports, expense and revenue reports and operational
accounts. In most cases, a CPA or Certified Public Accountant is engaged in the auditing
process. They obtain 'reasonable assurance' of records being accurate and fair and comply with
set standards. The auditing process also helps firms to identify certain inefficiencies in their
business processes and finances and make recommendations to improve the situation. However,
the main focus mostly remains to check any wrongdoings or non-compliance of firms.
Importance of Audits
Audits are important for a business as they provide a sense of credibility to the financial
statements and reports of the firm. It also gives stakeholders confidence that financial accounts
are fair and true to what is produced.
Moreover, an audit is an important process that helps in enhancing the financial health and
internal systems of a business. As the process can identify any inaccuracy or wrongdoings in
accounts, rectifying them for efficient business becomes easy.
Different Types of Audits
There are several types of audits that a business can choose to implement to assess the overall
health of the company. They are discussed as follows:

7|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Threshold Limit for Audit under GST by CA/CMA
Every GST registered taxable person whose turnover during a financial year exceeds the
prescribed limit is subject to audit. As per the current notified GST Rules, the turnover limit is
above Rs 2 crore. Such businesses must get their books of accounts audited by a chartered
accountant or a cost accountant. Such taxpayer shall electronically file:
 An annual return using the Form GSTR 9 by 31st December of the next Financial Year
 The audited copy of the annual accounts
 A certified reconciliation statement in the form GSTR-9C, reconciling the value of
supplies declared in the return with the audited annual financial statement
 Any other particulars as prescribed
 For businesses with an annual turnover of less than Rs.5 crore, filing of GSTR-9C for FY
2018-19 and FY 2019-20 has been waived off.
Rectifications to Returns After GST Audit
If any taxable person, after furnishing a GST return discovers any omission/incorrect details
(from results of audit), he can rectify subject to payment of interest.
However, no rectification will be allowed after the earlier of:
(i) the due date for filing of return for the month of September or second quarter, (as the case
may be), following the end of the financial year, or
(ii) the actual date of filing o the relevant annual return.
For example, Mr ‘X’ found during the audit that he has made a mistake in Oct 2020 return. X
submitted an annual return for FY 2020-21 on 31st December 2021 along with audited accounts.
He can rectify the Oct 2020 mistake within- 20th Oct 2021 (last date for filing September return)
or 31st December 2021 ( the actual date of filing of relevant annual return), whichever is earlier,
i.e., his last date for rectifying is 20th Oct 2021.
Such rectification will not be allowed where results are from scrutiny or audit by the tax
authorities.
Audit by Tax Authorities
 The Commissioner of CGST/SGST (or any officer authorized by him) may conduct an
audit of a taxpayer. The frequency and manner of an audit will be prescribed later.
 A notice will be sent to the auditee at least 15 days before.
 The audit will be completed within 3 months from the date of commencement of the
audit.
 The Commissioner can extend the audit period for a further six months with reasons
recorded in writing.

8|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Obligations of the Auditee
The taxable person will be required to:
1. provide the necessary facility to verify the books of account/other documents as required
2. to give information and assistance for timely completion of the audit.
Findings of Audit
On conclusion of an audit, the officer will inform the taxable person within 30 days of:
 the findings,
 their reasons, and
 the taxable person’s rights and obligations
If the audit results in the detection of unpaid/short paid tax or wrong refund or wrong input tax
credit availed, then demand and recovery actions will be initiated.
Special Audit under GST
The Assistant Commissioner may initiate the special audit, considering the nature and
complexity of the case and interest of revenue. If he is of the opinion during any stage of
scrutiny/ inquiry/investigation that the value has not been correctly declared or the wrong credit
has been availed then a special audit can be initiated. A special audit can be conducted even if
the taxpayer’s books have already been audited before.
Who will order and conduct a special audit
The Assistant Commissioner (with the prior approval of the Commissioner) can order for special
audit (in writing). The special audit will be carried out by a chartered accountant or a cost
accountant nominated by the Commissioner.
What is the time limit to initiate a special audit under GST
The auditor will have to submit the report within 90 days. This may be further extended by the
tax officer for 90 days on an application made by the taxable person or the auditor.
Who will bear the expenses of the special audit
The expenses for examination and audit including the auditor’s remuneration will be determined
and paid by the Commissioner.
How are the findings of the special audit dealt with:-
The taxable person will be given an opportunity of being heard in the findings of the special
audit. If the audit results in detection of unpaid/short paid tax or wrong refund or input tax credit
wrongly availed then demand and recovery actions will be initiated.

9|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 Penalties under GST
The word “penalty” is not specifically defined in GST and so it takes the meaning from various
judicial pronouncements and principles of jurisprudence. A penalty is a punishment imposed by
law for committing an offence or failing to do something that was the duty of a party to do. A
penalty can be both corporal or pecuniary, civil or criminal. Both corporal (jail) and pecuniary
(monetary) penalties are applicable under GST.
Common Offences Under GST And Their Penalties

Type of offence Amount of penalty

The late fee is Rs. 100 per day per Act. So it is 100 under
Penalty for delay in filing
CGST & 100 under SGST. Total will be Rs. 200/day.
GSTR
The maximum is Rs. 5,000. There is no late fee on IGST.

Penalty 10% of the tax due or Rs. 10,000 – whichever is

Penalty for not filing GSTR
higher

Penalty for committing a Penalty 100% of the tax due or Rs. 10,000 – whichever is

fraud higher (High-value fraud cases also have jail term)

Penalty for helping a person

Penalty extending up to Rs. 25,000
to commit fraud

10 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 Demand & recovery provisions of sections 73 & 74 will

apply.
Penalty for opting for
(i) Fraud case- Penalty 100% of the tax due or Rs. 10,000
composition scheme even
– whichever is higher
though he is not eligible
(ii) Non-fraud case Penalty 10% of the tax due or Rs.

10,000 – whichever is higher

Penalty for wrongfully Penalty 100% of the tax due or Rs. 10,000 -whichever

charging GST rate— charging is higher (if the additional GST collected is not submitted

a higher rate with the govt)

Penalty for not issuing an Penalty 100% of the tax due or Rs. 10,000 – whichever is

invoice higher

Penalty for not registering Penalty 100% of the tax due or Rs. 10,000 – whichever is
under GST higher

Penalty for incorrect

A penalty of Rs. 25,000
invoicing

11 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Situations where there is no penalty (but interest may apply)

Type of offence Action

Penalty for incorrect type of GST No penalty. Pay the correct GST and get a

charged (IGST instead of CGST/SGST) refund of the wrong type of GST paid earlier

No penalty. But interest @18% on shortfall

Penalty for incorrect filing of GST return
amount

ITC will be reversed if not paid within 6

Penalty for delay in payment of invoice.
months. No penalty as such

Penalty for wrongfully charging GST

Interest @18% applicable on the shortfall
rate— charging a lower rate

Penalties Under GST

If any of the offences are committed then a penalty will have to be paid under GST. The
principles on which these penalties are based are also mentioned by law.
Penalty in cases of fraud
An offender has to pay a penalty amount of tax evaded/short deducted etc., i.e., 100% penalty,
subject to a minimum of Rs. 10,000. For the 21 offences above, for fraud cases, the penalty will
be 100% (minimum Rs. 10,000).
What is the penalty for helping someone to commit fraud under GST
Not only the taxable person but any person who does the following will have to pay a penalty
extending up to Rs. 25,000
12 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi
  Helps any person to commit fraud under GST
 Acquires/receives any goods/services with full knowledge that it is in violation of GST
rules
 Fails to appear before the tax authority on receiving a summons
 Fails to issue an invoice according to GST rules
 Fails to account/vouch any invoice appearing in the books
Are there any jail punishments
Yes, GST has corporal punishments (jail) for high-value fraud cases as follows-

Tax amount involved 100-200 lakhs 200-500 lakhs Above 500 lakhs

Jail term Up to 1 year Upto 3 years Upto 5 year

Fine In all three cases

Eway Bill
EWay Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill
Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs.
50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on
ewaybillgst.gov.in. Alternatively, Eway bill can also be generated or cancelled through SMS,
Android App and by site-to-site integration through API entering the correct GSTIN of parties.
Validate the GSTIN with the help of the GST search tool before using it.
When an Eway bill is generated, a unique Eway Bill Number (EBN) is allocated and is available
to the supplier, recipient, and the transporter.

When Should Eway Bill be issued :-

EWay bill will be generated when there is a movement of goods in a vehicle/ conveyance of value
more than Rs. 50,000 (either each Invoice or in aggregate of all invoices in a vehicle/conveyance):-
 In relation to a ‘supply’

13 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

  For reasons other than a ‘supply’ ( say a return)
 Due to inward ‘supply’ from an unregistered person

For this purpose, a supply may be either of the following:

 A supply made for a consideration (payment) in the course of business
 A supply made for a consideration (payment) which may not be in the course of business
 A supply without consideration (without payment)In simpler terms, the term ‘supply’
usually means a:
 Sale – sale of goods and payment made
 Transfer – branch transfers for instance
 Barter/Exchange – where the payment is by goods instead of in money
Therefore, eWay Bills must be generated on the common portal for all these types of movements.
For certain specified Goods, the eway bill needs to be generated mandatorily even if the value of
the consignment of Goods is less than Rs. 50,000:
 Inter-State movement of Goods by the Principal to the Job-worker by Principal/ registered
Job-worker
 Inter-State Transport of Handicraft goods by a dealer exempted from GST registration

Who should Generate an eWay Bill :-

1. Registered Person – Eway bill must be generated when there is a movement of goods of
more than Rs 50,000 in value to or from a registered person. A Registered person or the
transporter may choose to generate and carry eway bill even if the value of goods is less
than Rs 50,000.
2. Unregistered Persons – Unregistered persons are also required to generate e-Way Bill.
However, where a supply is made by an unregistered person to a registered person, the
receiver will have to ensure all the compliances are met as if they were the supplier.
3. Transporter – Transporters carrying goods by road, air, rail, etc. also need to generate e-
Way Bill if the supplier has not generated an e-Way Bill.
The transporters need not generate the Eway bill (as Form EWB-01 or EWB-02) where all
the consignments in the conveyance :
 Individually(single Document) is less than or equal to Rs 50,000 BUT
 In Aggregate (all documents put together) exceeds Rs 50,000
Note:- Unregistered Transporters will be issued Transporter ID on enrolling on the e-way bill
portal after which Eway bills can be generated.
14 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi
 Who When Part Form

Every Registered person under Before movement Fill Part

Form GST EWB-01
GST of goods A

Registered person is consignor

or consignee (mode of transport Before movement Fill Part

Form GST EWB-01
may be owned or hired) OR is of goods B

recipient of goods

The registered

person shall furnish

Registered person is consignor
the information
or consignee and goods are Before movement Fill Part
relating to the
handed over to transporter of of goods B
transporter in Part B
goods
of FORM GST

EWB-01

Generate e-way bill

Before movement on basis of
Transporter of goods
of goods information shared

by the registered

15 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 person in Part A of

FORM GST EWB-

01

1. If the goods are

transported for a

distance of fifty

kilometers or less,

within the same

State/Union territory

from the place of

business of the
Compliance to be consignor to the
An unregistered person under done by Recipient place of business of
GST and recipient is registered as if he is the the transporter for
Supplier. further

transportation, the

supplier or the

transporter may not

furnish the details of

conveyance in Part

B of FORM GST

EWB-01. 2. If

supply is made by

16 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 air, ship or railways,

then the information

in Part A of FORM

GST EWB-01 has to

be filled in by the

consignor or the

recipient

Cases when Eway bill is Not Required :-

 The mode of transport is non-motor vehicle
 Goods transported from Customs port, airport, air cargo complex or land customs station
to Inland Container Depot (ICD) or Container Freight Station (CFS) for clearance by
Customs.
 Goods transported under Customs supervision or under customs seal
 Goods transported under Customs Bond from ICD to Customs port or from one custom
station to another.
 Transit cargo transported to or from Nepal or Bhutan
 Movement of goods caused by Defence formation under Ministry of Defence as a
consignor or consignee
 Empty Cargo containers are being transported
 Consignor transporting goods to or from between place of business and a weighbridge for
weighment at a distance of 20 kms, accompanied by a Delivery challan.
 Goods being transported by rail where the Consignor of goods is the Central Government,
State Governments or a local authority.
 Goods specified as exempt from E-Way bill requirements in the respective State/Union
territory GST Rules.
 Transport of certain specified goods- Includes the list of exempt supply of goods, Annexure
to Rule 138(14), goods treated as no supply as per Schedule III, Certain schedule to Central
tax Rate notifications. (PDF of List of Goods).
Documents or Details required to generate Eway Bill
 Invoice/ Bill of Supply/ Challan related to the consignment of goods
 Transport by road – Transporter ID or Vehicle number

17 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

  Transport by rail, air, or ship – Transporter ID, Transport document number, and date on
the document

How to generate Eway Bill on portal

E-Way Bill and the e-way bill number can be generated on the e-Way Bill Portal. All you need is
a Portal login.
SMS e-way bill generation on mobile
You can generate e-way bills via SMS using registered mobile phone. All can begin by enabling
SMS e-way bill generate facility. Register the mobile phone to be used for SMS facility of e-way
bill generation. Thereafter, send simple SMS codes to a particular mobile number managed by the
e-way bill portal/GSTN to generate, manage and cancel e-way bills.

Validity of Eway Bill

An e-way bill is valid for periods as listed below, which is based on the distance travelled by the
goods. Validity is calculated from the date and time of generation of e-way bill: -

Type of conveyance Distance Validity of E way Bill

Less Than 200 Kms 1 Day

Other than Over

dimensional cargo For every additional 200

additional 1 Day
Kms or part thereof

Less Than 20 Kms 1 Day

For Over dimensional

cargo For every additional 20

additional 1 Day
Kms or part thereof

18 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi