Extract of Section 62 of the CGST Act, 2017
Section 62 of the Central Goods and Services Tax (CGST) Act, 2017 pertains to the best-judgment assessment of return non-filers. This process involves the proper officer assessing the tax liability of a taxpayer who fails to file returns. The assessment is based on available information and records, and the officer uses their best judgment to determine the tax liability.
Section 62: Assessment of Non-Filers of Returns
(1) Notwithstanding anything to the contrary contained in section 73 or section 74, where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgment. The officer will take into account all the relevant material which is available or which he has gathered. This material could include past returns, e-way bills, invoices, and any other documents that provide information about the taxpayer’s business activities and transactions.
(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn. However, it’s important to note that the liability for payment of interest and late fees will still be applicable. Interest is a charge levied on the unpaid tax amount, calculated from the due date of filing the return to the date of actual payment. Late fee, on the other hand, is a penalty for late filing of the return, and it’s charged at a fixed rate per day of delay.
ASMT-14 Notice
GST ASMT-14 is a notice issued by the GST authorities to a taxpayer when a best judgment assessment is conducted under Section 62. This notice serves as the formal communication of the assessment order, detailing the assessed tax liability based on the tax officer’s best judgment due to the taxpayer’s failure to file returns. It is crucial for the recipient to understand this notice fully, as it empowers them to take the necessary steps to address the assessed tax liability.
Example Scenario
Suppose a business, XYZ Pvt Ltd, fails to file its GST returns for several months despite receiving a notice under Section 46. Using available information such as past returns, e-way bills, and other relevant data, the GST officer conducts a best judgment assessment and issues an ASMT-14 notice to XYZ Pvt Ltd detailing the assessed tax liability.
Legal Recourse and Proceedings
Legal Recourse
When a taxpayer receives an ASMT-14 notice, they should:
Legal Proceedings
If the taxpayer fails to respond adequately or if the response is not satisfactory, the GST authorities may proceed with the following:
Penalties and Prosecution
Penalties for non-compliance with the ASMT-14 notice can include:
Do’s and Don’ts on Receiving a GST ASMT-14 Notice
Do’s
Don’ts
Legal Remedy
If a taxpayer believes that the assessment order is unjust or that they face undue hardship, they have the following remedies: This reassurance about the availability of legal recourse can help instil a sense of security and confidence in the recipients.
Conclusion
Section 62 of the CGST Act 2017 provides the framework for the best judgment assessment of non-filers of returns. The GST ASMT-14 notice is integral to this process, conveying the assessment order to the taxpayer. Understanding how to respond to such notices, the potential penalties, and the available legal remedies can help businesses navigate the best judgment assessment process smoothly and avoid possible legal issues. Proper preparation and professional guidance are essential to handling assessments effectively and ensuring compliance with GST regulations.
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