Summary Assessment Notice (GST ASMT-16)

Legal Basis: Section 64 of the CGST Act, 2017

Extract of Section 64 of the CGST Act, 2017

Section 64 of the Central Goods and Services Tax (CGST) Act, 2017, deals with summary assessments in certain exceptional cases. This section allows tax authorities to quickly determine tax liability when there is sufficient evidence that a delay in evaluation could adversely affect revenue.

Section 64: Summary Assessment in Certain Special Cases

(1) The proper officer may, on any evidence showing a tax liability of a person coming to his notice, with the previous permission of the Additional Commissioner or Joint Commissioner, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue.

(2) The proper officer shall, wherever possible, issue a notice to the person concerned and hear him before passing the order under sub-section (1).

(3) On an application made by the taxable person within thirty days from the date of receipt of the order passed under sub-section (1) or on his motion, if the Additional Commissioner or Joint Commissioner considers that such order is erroneous, he may withdraw such order and follow the procedure laid down in Section 73 or Section 74.

Summary Assessment Notice (GST ASMT-16)

GST ASMT-16 is a notice issued by the GST authorities to a taxpayer when a summary assessment is conducted under Section 64. This notice is typically issued when the tax authorities believe that there is sufficient evidence of tax liability and that delaying the assessment could harm revenue interests.

Example Scenario

Consider a scenario where the tax authorities discover that a business, XYZ Traders, has been involved in significant underreporting of sales. Based on concrete evidence, such as sales records and third-party information, the authorities believe that a delay in assessing the tax liability could result in a loss of revenue. They issue a GST ASMT-16 notice to XYZ Traders to quickly determine and recover the tax dues.

Legal Recourse and Proceedings

Legal Recourse

When a taxpayer receives a GST ASMT-16 notice, they should:

1. Review the Notice: It is crucial to carefully read the notice to fully grasp the basis of the summary assessment and the evidence used to determine the tax liability. This understanding will empower you to respond effectively.
2. Seek Professional Advice: It’s highly recommended to consult a GST practitioner or tax consultant when preparing your response. Their expertise can significantly impact the outcome of your case.
3. Request a Hearing: If possible, request a hearing to present your case before the final assessment order.

Legal Proceedings

If the taxpayer disagrees with the summary assessment, they can:

• File an Application for Withdrawal: Within 30 days of receiving the order, submit an application to the Additional Commissioner or Joint Commissioner requesting the withdrawal of the summary assessment order.
• Follow Section 73 or 74 Procedures: If the order is withdrawn, the authorities will follow the regular procedures for demand and recovery under Section 73 (non-fraud cases) or Section 74 (fraud cases).

Penalties and Prosecution

Penalties and prosecution under Section 64 can vary depending on the nature of the tax liability determined:

• Monetary Penalty: A penalty per the CGST Act’s provisions, which could include fines up to 10% of the tax due or more in cases involving fraud.
• Interest: Interest on the unpaid tax as per Section 50 of the CGST Act.
• Prosecution: In cases involving fraud or willful misstatement, prosecution under GST laws may be initiated, including imprisonment and additional fines.

Do’s and Don’ts on Receiving a GST ASMT-16 Notice

Do’s

1. Read Carefully: Understand the reasons for the summary assessment and the evidence provided.
2. Gather Evidence: Collect all necessary documents, such as invoices, returns, and correspondence with GST authorities.
3. Consult a Professional: Seek advice from a GST practitioner or tax consultant to formulate a strong response.
4. Request a Hearing: If possible, request a hearing to present your case directly to the tax authorities.
5. Maintain Records: Keep copies of the notice and your response for future reference.

Don’ts

1. Ignore the Notice: Ignoring the notice will finalise the assessment and initiate recovery proceedings.
2. Delay Response: Delaying your response can result in additional interest and penalties.
3. Provide Incomplete Information: Ensure all the information and documents submitted are complete and accurate.
4. Disregard Professional Advice: Always consult with a professional if you are unsure about the notice’s content or implications.

Legal Remedy

If a taxpayer believes that the summary assessment is unjust, they have the following remedies at their disposal. This knowledge should provide a sense of hope and reassurance:

1. File an Application for Withdrawal: Within 30 days of receiving the order, apply to the Additional Commissioner or Joint Commissioner requesting the withdrawal of the summary assessment order.
2. Appeal: If dissatisfied with the outcome, the taxpayer can file an appeal under Section 107 of the CGST Act within three months from the order date.
3. Seek Legal Advice: Consult with a legal expert or GST practitioner to explore further legal remedies, including filing a writ petition if there is a violation of principles of natural justice.

Conclusion

Section 64 of the CGST Act 2017 provides the framework for summary assessments to protect the government’s revenue interests. The GST ASMT-16 notice serves as a tool for tax authorities to quickly determine and recover tax dues when there is sufficient evidence of tax liability. Understanding how to respond to such notices, the potential penalties, and the available legal remedies can help businesses navigate the complexities of GST compliance and avoid severe legal consequences.