Assessment under GST

What is Assessment under GST?

Assessment under GST is a process by which the tax authorities examine the returns filed by
taxpayers to verify the correctness of their tax liability. The purpose of assessment is to
ensure that taxpayers have accurately calculated and paid their taxes. Assessment is an
important tool to detect any errors or discrepancies in the returns filed by taxpayers.

Types of Assessment under GST

There are six types of assessment under GST:

1. Self-Assessment: This is the first level of assessment, which is done by the taxpayers
themselves. In self-assessment, the taxpayer calculates and pays their own tax liability,
and files the returns accordingly. This is done on a monthly, quarterly or annual basis,
depending on the turnover of the taxpayer. The relevant section under GST for self-
assessment is Section 59.
2. Provisional Assessment: Provisional assessment can be resorted to only in two possible
scenarios 1st is when the registered person is unable to determine the value of supply and
2nd is when registered person is unable to determine the rate of tax. Apart from the above
two scenarios, provisional assessment cannot be applied by the taxable person for any
other purpose. Within the 90 days from the receipt of such request the proper office shall
pass an order, allowing payment of tax on a provisional basis at such rate or on such value
as may be specified by him. The final assessment order should be passed within six
months from the date of communication of provisional assessment order. The relevant
section under GST for provisional assessment is Section 60.
3. Scrutiny Assessment: Scrutiny assessment is done by the tax authorities to verify the
correctness of the returns filed by taxpayers. This is applicable for only registered persons
and not to unregistered persons. Notice under section 61 can be issued only if return has
been filed by the registered persons. The tax authorities can issue a notice to the taxpayer,
asking them to provide additional information or documents to support their returns. The
tax authorities can also conduct an audit of the taxpayer‘s records. Based on the
information obtained, the tax authorities can issue an assessment order, which specifies
 the final amount of tax to be paid by the taxpayer. The relevant section under GST for
scrutiny assessment is Section 61.
4. Best Judgment Assessment: Best judgment assessment is done when the taxpayer fails to
furnish the return under Section 39 or Section 45, even after the service of a notice under
Section 46, the proper office may assess the tax liability of the said person to the best of
his judgement taking into account all the material which is available or he has gathered
and issue an assessment order within a period of five years from the date specified under
section 44 for furnishing of the annual return for the financial year to which the tax not
paid relates. The relevant section under GST for best judgment assessment is Section 62.
5. Assessment of Unregistered Persons: When a taxable person fails to obtain registration
even though liable to do so or whose registration has been cancelled under sub section (2)
of Section 29 but who was liable to pay tax, the proper officer may proceed to assess the
tax liability of such taxable person to the best of his judgement for the relevant tax
periods. He will issue an assessment order within a period of five years from the date
specified under section 44 for furnishing of the annual return for the financial year to
which the tax not paid relates. No such assessment order shall be passed without giving
the person an opportunity of being heard. The relevant section under GST for the
assessment of unregistered persons is Section 63.
6. Summary Assessment: Summary assessment is done in certain special cases, such as
when the tax authorities believe that the taxpayer is trying to evade tax or when there is a
threat to revenue. There should be evidence available with the proper officer that tax is
payable and remains unpaid. Prior permission is required from the Additional
Commissioner and Joint Commissioner. It is believed that any delay in assessment would
harm the revenue‘s interest. If the taxpayer to whom the liability pertains is not
ascertainable, then such liability is fastened to the person in charge of such goods.
Generally summary assessment is resorted to in cases of absconding and defaulting
taxpayers. There is no time limit prescribed for passing of order. The section does not
mention that the said person should be given an opportunity of being heard. The relevant
section under GST for summary assessment is Section 64.

Procedure for Assessment under GST

The procedure for assessment under GST is as follows:

 Issue of Notice: The tax authorities can issue a notice to the taxpayer, asking them to provide
additional information or documents to support their returns. The notice must specify the
reason for the assessment, the period under assessment, and the nature of the information or
documents required.
 Conduct of Audit: The tax authorities can conduct an audit of the taxpayer‘s records to
verify the correctness of their returns. The audit can be done on-site or off-site, and the
taxpayer must provide all necessary information and documents to the auditors.
 Issue of Assessment Order: Based on the information obtained through the notice and audit,
the tax authorities can issue an assessment order. The assessment order specifies the final
amount of tax to be paid by the taxpayer. The assessment order can also include interest,
penalties, and fines, if applicable.
 Rectification of Errors: If the taxpayer disagrees with the assessment order, they can request
rectification of errors. The request must be made within 30 days of the receipt of the
assessment order. The tax authorities will then review the request and issue a revised
assessment order if necessary.
 Appeal: If the taxpayer is still dissatisfied with the assessment order after rectification, they
can file an appeal with the appropriate appellate authority. The appeal must be filed within
three months of the receipt of the assessment order. The appellate authority will then review
the case and issue a final order.

Importance of Assessment under GST

Assessment under GST is important for the following reasons:

 Ensures Compliance: Assessment ensures that taxpayers are complying with the GST laws
and regulations. GST Compliance is crucial for a smooth business work-flow. This helps
prevent tax evasion and ensures that the government collects tax revenue correctly.
 Detects Errors and Discrepancies: Assessment helps detect any errors or discrepancies in
the returns filed by taxpayers. This helps prevent the loss of tax revenue due to mistakes or
intentional evasion.
 Improves Taxpayer Education: Assessment helps educate taxpayers on the correct
procedures for calculating and paying their taxes. This helps improve GST compliance and
reduces the number of errors or discrepancies in the returns filed.
 Common Mistakes to Avoid

It is crucial to understand some of the common mistakes that taxpayers make when filing
their returns. These mistakes can result in incorrect assessment and ultimately lead to
penalties and interest. Here are some of the common mistakes to avoid when filing GST
returns:

 Incorrect classification of goods and services: GST rates vary depending on the
classification of goods and services. Taxpayers need to ensure that they classify their goods
and services correctly to avoid incorrect assessments.
 Incorrect calculation of tax liability: Taxpayers must ensure that they accurately calculate
their tax liability based on the GST rates applicable to their goods or services. Incorrect
calculation can result in incorrect assessment and penalties.
 Delayed filing of returns: GST returns must be filed on time to avoid penalties and interest.
Taxpayers must ensure that they file their returns by the due date to avoid any additional
charges.
 Failure to report input tax credit: Taxpayers are allowed to claim the input tax credit on
their purchases to reduce their tax liability. Failure to report input tax credit can result in
incorrect assessment and penalties.
 Incorrect reporting of turnover: Taxpayers must ensure that they report their turnover
accurately to avoid incorrect assessment.

It is also important for taxpayers to keep proper records of their transactions and maintain
compliance with the GST laws and regulations. This will help them to ensure that their
assessments are accurate and avoid any legal or financial complications in the future.

Taxability of E Commerce: Every electronic commerce operator shall collect an amount

calculated at a rate not exceeding 1% (0.5% CGST and 0.5% SGST; In case of interstate
transactions, 1% under IGST Act), as may be notified by the Government on the
recommendations of the Council, of the net value of taxable supplies.

E-Commerce aggregators are responsible under the GST law for collecting and depositing tax
at the rate of 1% on each transaction under the Section 52 of the CGST Act. Any
dealers/traders selling goods/services online would get the payment after deduction of 1%
tax.
National Anti-Profiteering Authority : The National Anti-Profiteering Authority (NAA) is a
statutory body established under the Goods and Services Tax (GST) law. Its primary role is to
monitor and regulate any irregular and unfair profiteering activities by registered suppliers.
The Authority's main function is to ensure that the registered suppliers under GST law are not
profiteering by charging higher prices from recipients in the name of GST.

Returns under GST

Form and manner of furnishing details of outward supplies

(1) Every registered person (other than a person referred to in section 14 of the Integrated
Goods and Services Tax Act, 2017) required to furnish the details of outward supplies of
goods or services or both under section 37, shall furnish such details in FORM GSTR-1
electronically through the Common Portal, either directly or through a Facilitation Centre
notified by the Commissioner.

(2) The details of outward supplies of goods or services or both furnished in FORM GSTR1
shall include, inter alia, –

(a) invoice wise details of all –

(i) inter-State and intra-State supplies made to registered persons; and

(ii) inter-State supplies with invoice value more than two and a half lakh rupees made to
unregistered persons;

(b) consolidated details of all –

(i) intra-State supplies made to unregistered persons for each rate of tax; and

(ii) State wise inter-State supplies with invoice value up to two and a half lakh rupees made
to unregistered persons for each rate of tax;

(c) debit and credit notes, if any, issued during the month for invoices issued previously.

(3) The details of outward supplies furnished by the supplier shall be made available
electronically to the concerned registered persons (recipients) in Part A of FORM GSTR-2A,
in FORM GSTR-4A and in FORM GSTR-6A through the Common Portal after the due date
of filing of FORM GSTR-1.

(4) The details of inward supplies added, corrected or deleted by the recipient in his FORM
GSTR-2 under section 38 or FORM GSTR-4 or FORM GSTR-6 under section 39 shall be
made available to the supplier electronically in FORM GSTR-1A through the Common Portal
and such supplier may either accept or reject the modifications made by the recipient and
FORM GSTR-1 furnished earlier by the supplier shall stand amended to the extent of
modifications accepted by him.

Form and manner of furnishing details of inward supplies

(1) Every registered person (other than a person referred to in section 14 of the Integrated
Goods and Services Tax Act, 2017) required to furnish the details of inward supplies of
goods or services or both received during a tax period under sub-section (2) of section 38
shall, on the basis of details contained in Part A, Part B and Part C of FORM GSTR-2A,
prepare such details as specified in sub-section (1) of the said section and furnish the same in
FORM GSTR-2 2 electronically through the Common Portal, either directly or from a
Facilitation Centre notified by the Commissioner, after including therein details of such other
inward supplies, if any, required to be furnished under sub-section (2) of section 38.

(2) Every registered person shall furnish the details, if any, required under sub-section (5) of
section 38 electronically in FORM GSTR-2.

3) The registered person shall specify the inward supplies in respect of which he is not
eligible, either fully or partially, for input tax credit in FORM GSTR-2 where such eligibility
can be determined at the invoice level.

(4) The registered person shall declare the quantum of ineligible input tax credit on inward
supplies which is relatable to non-taxable supplies or for purposes other than business and
cannot be determined at the invoice level in FORM GSTR-2. (4A) The details of invoices
furnished by an non-resident taxable person in his return in FORM GSTR-5 under rule 5 shall
be made available to the recipient of credit in Part A of FORM GSTR-2A electronically
through the Common Portal and the said recipient may include the same in FORM GSTR-2.
(5) The details of invoices furnished by an Input Service Distributor in his return in FORM
GSTR-6 under rule 7 shall be made available to the recipient of credit in Part B of FORM
GSTR-2A electronically through the Common Portal and the said recipient may include the
same in FORM GSTR-2.

(6) The details of tax deducted at source furnished by the deductor under sub-section (3) of
section 39 in FORM GSTR-7 shall be made available to the deductee in Part C of FORM
GSTR-2A electronically through the Common Portal and the said deductee may include the
same in FORM GSTR-2.

(7) The details of tax collected at source furnished by an e-commerce operator under section
52 in FORM GSTR-8 shall be made available to the concerned person in Part C of FORM
GSTR-2A electronically through the Common Portal and such person may include the same
in FORM GSTR-2.

(8) The details of inward supplies of goods or services or both furnished in FORM GSTR-2
shall include, inter alia, -

(a) invoice wise details of all inter-State and intra-State supplies received from registered
persons or unregistered persons;

(b) import of goods and services made; and

(c) debit and credit notes, if any, received from supplier.

Form and manner of submission of monthly return

(1) Every registered person, other than a person referred to in section 14 of the Integrated
Goods and Services Tax Act, 2017 or an Input Service Distributor or a non-resident taxable
person or a person paying tax under section 10 or section 51 or, as the case may be, under
section 3 52 shall furnish a return specified under sub-section (1) of section 39 in FORM
GSTR-3 electronically through the Common Portal either directly or through a Facilitation
Centre notified by the Commissioner.
(2) Part A of the return under sub-rule (1) shall be electronically generated on the basis of
information furnished through FORM GSTR-1, FORM GSTR-2 and based on other liabilities
of preceding tax periods.

(3) Every registered person furnishing the return under sub-rule (1) shall, subject to the
provisions of section 49, discharge his liability towards tax, interest, penalty, fees or any
other amount payable under the Act or these rules by debiting the electronic cash ledger or
electronic credit ledger and include the details in Part B of the return in FORM GSTR-3.

(4) A registered person, claiming refund of any balance in the electronic cash ledger in
accordance with the provisions of sub-section (6) of section 49, may claim such refund in
Part B of the return in FORM GSTR-3 and such return shall be deemed to be an application
filed under section 54.

(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in
FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, return
in FORM GSTR-3B, in lieu of FORM GSTR-3, may be furnished in such manner as may be
notified by the Commissioner.

Form and manner of submission of quarterly return by the composition supplier

(1) Every registered person paying tax under section 10 shall, on the basis of details
contained in FORM GSTR-4A, and where required, after adding, correcting or deleting the
details, furnish the quarterly return in FORM GSTR-4 electronically through the Common
Portal, either directly or through a Facilitation Centre notified by the Commissioner.

(2) Every registered person furnishing the return under sub-rule (1) shall discharge his
liability towards tax, interest, penalty, fees or any other amount payable under the Act or
these rules by debiting the electronic cash ledger.

(3) The return furnished under sub-rule (1) shall include, inter alia,-

(a) invoice wise inter-State and intra-State inward supplies received from registered and un-
registered persons; and

(b) consolidated details of outward supplies made.

(4) A registered person who has opted to pay tax under section 10 from the beginning of a
financial year shall, where required, furnish the details of outward and inward supplies and
return under rule 1, rule 2 and rule 3 relating to the period during which the person was liable
to furnish such details and returns till the due date of furnishing the return for the month of
September of the succeeding financial year or furnishing of annual return of the preceding
financial year, whichever is earlier.

Explanation– The person shall not be eligible to avail of input tax credit on receipt of
invoices or debit notes from the supplier for the period prior to his opting for the composition
scheme.

(5) A registered person opting to withdraw from the composition scheme at his own motion
or where option is withdrawn at the instance of the proper officer shall, where required,
furnish the details relating to the period prior to his opting for payment of tax under section 9
in FORM GSTR-4 till the due date of furnishing the return for the quarter ending September
of the succeeding financial year or furnishing of annual return of the preceding financial year,
whichever is earlier.

Form and manner of submission of return by non-resident taxable person

Every registered non-resident taxable person shall furnish a return in FORM GSTR-5
electronically through the Common Portal, either directly or through a Facilitation Centre
notified by the Commissioner, including therein the details of outward supplies and inward
supplies and shall pay the tax, interest, penalty, fees or any other amount payable under the
Act or these rules within twenty days after the end of a tax period or within seven days after
the last day of the validity period of registration, whichever is earlier.

Form and manner of submission of return by persons providing online information and
database access or retrieval services

Every registered person providing online information and data base access or retrieval
services from a place outside India to a person in India other than a registered person shall
file return in FORM GSTR-5A on or before the twentieth day of the month succeeding the
calendar month or part thereof.

Form and manner of submission of return by an Input Service Distributor

Every Input Service Distributor shall, on the basis of details contained in FORM GSTR-6A,
and where required, after adding, correcting or deleting the details, furnish electronically the
return in FORM GSTR-6, containing the details of tax invoices on which credit has been
received and those issued under section 20, through the Common Portal either directly or
from a Facilitation Centre notified by the Commissioner.

Form and manner of submission of return by a person required to deduct tax at source

(1) Every registered person required to deduct tax at source under section 51 shall furnish a
return in FORM GSTR-7 electronically through the Common Portal either directly or from a
Facilitation Centre notified by the Commissioner.

(2) The details furnished by the deductor under sub-rule (1) shall be made available
electronically to each of the suppliers in Part C of FORM GSTR-2A and FORM-GSTR-4A
on the Common Portal after the due date of filing of FORM GSTR-7.

(3) The certificate referred to in sub-section (3) of section 51 shall be made available
electronically to the deductee on the Common Portal in FORM GSTR-7A on the basis of the
return furnished under sub-rule (1).

Form and manner of submission of statement of supplies through an e-commerce

operator

(1) Every electronic commerce operator required to collect tax at source under section 52
shall furnish a statement in FORM GSTR-8 electronically on the Common Portal, either
directly or from a Facilitation Centre notified by the Commissioner, containing details of
supplies effected through such operator and the amount of tax collected as required under
sub-section (1) of section 52.

(2) The details furnished by the operator under sub-rule (1) shall be made available
electronically to each of the suppliers in Part C of FORM GSTR-2A on the Common Portal
after the due date of filing of FORM GSTR-8.

Notice to non-filers of returns

A notice in FORM GSTR-3A shall be issued, electronically, to a registered person who fails
to furnish return under section 39 or section 44 or section 45 or section 52.

Matching of claim of input tax credit

The following details relating to the claim of input tax credit on inward supplies including
imports, provisionally allowed under section 41, shall be matched under section 42 after the
due date for furnishing the return in FORM GSTR-3

(a) GSTIN of the supplier;

(b) GSTIN of the recipient;

(c) invoice or debit note number;

(d) invoice or debit note date; and

(e) tax amount:

Provided that where the time limit for furnishing FORM GSTR-1 specified under section 37
and FORM GSTR-2 specified under section 38 has been extended, the date of matching
relating to claim of input tax credit shall also be extended accordingly: Provided further that
the Commissioner may, on the recommendations of the Council, by order, extend the date of
matching relating to claim of input tax credit to such date as may be specified therein.

Explanation 1- The claim of input tax credit in respect of invoices and debit notes in FORM
GSTR-2 that were accepted by the recipient on the basis of FORM GSTR-2A without
amendment shall be treated as matched if the corresponding supplier has furnished a valid
return.

Explanation 2 - The claim of input tax credit shall be considered as matched where the
amount of input tax credit claimed is equal to or less than the output tax paid on such tax
invoice or debit note by the corresponding supplier.

Final acceptance of input tax credit and communication thereof

(1) The final acceptance of claim of input tax credit in respect of any tax period, specified in
sub-section (2) of section 42, shall be made available electronically to the registered person
making such claim in FORM GST MIS-1 through the Common Portal.

(2) The claim of input tax credit in respect of any tax period which had been communicated
as mismatched but is found to be matched after rectification by the supplier or recipient shall
be finally accepted and made available electronically to the person making such claim in
FORM GST MIS-1 through the Common Portal.

Communication and rectification of discrepancy in claim of input tax credit and

reversal of claim of input tax credit

(1) Any discrepancy in the claim of input tax credit in respect of any tax period, specified in
sub-section (3) of section 42 and the details of output tax liable to be added under sub-section
(5) of the said section on account of continuation of such discrepancy, shall be made
available to the recipient making such claim electronically in FORM GST MIS-1 and to the
supplier electronically in FORM GST MIS-2 through the Common Portal on or before the
last date of the month in which the matching has been carried out.

(2) A supplier to whom any discrepancy is made available under sub-rule (1) may make
suitable rectifications in the statement of outward supplies to be furnished for the month in
which the discrepancy is made available.

(3) A recipient to whom any discrepancy is made available under sub-rule (1) may make
suitable rectifications in the statement of inward supplies to be furnished for the month in
which the discrepancy is made available.

(4) Where the discrepancy is not rectified under sub-rule (2) or sub-rule (3), an amount to the
extent of discrepancy shall be added to the output tax liability of the recipient in his return to
be furnished in FORM GSTR-3 for the month succeeding the month in which the discrepancy
is made available.

Explanation 1- Rectification by a supplier means adding or correcting the details of an

outward supply in his valid return so as to match the details of corresponding inward supply
declared by the recipient.
Explanation 2- Rectification by the recipient means deleting or correcting the details of an
inward supply so as to match the details of corresponding outward supply declared by the
supplier.

Claim of input tax credit on the same invoice more than once Duplication of claims of input
tax credit in the details of inward supplies shall be communicated to the registered person in
FORM GST MIS-1 electronically through the Common Portal.

Matching of claim of reduction in the output tax liability

The following details relating to the claim of reduction in output tax liability shall be matched
under section 43 after the due date for furnishing the return in FORM GSTR-3:-

(a) GSTIN of the supplier;

(b) GSTIN of the recipient;

(c) credit note number;

(d) credit note date; and

(e) tax amount:

Provided that where the time limit for furnishing FORM GSTR-1 under section 37 and
FORM GSTR-2 under section 38 has been extended, the date of matching of claim of
reduction in the output tax liability shall be extended accordingly:

Provided further that the Commissioner may, on the recommendations of the Council, by
order, extend the date of matching relating to claim of reduction in output tax liability to such
date as may be specified therein.

Explanation 1- The claim of reduction in output tax liability due to issuance of credit notes in
FORM GSTR-1 that were accepted by the corresponding recipient in FORM GSTR-2
without amendment shall be treated as matched if the said recipient has furnished a valid
return.
Explanation 2— The claim of reduction in the output tax liability shall be considered as
matched where the amount of output tax liability after taking into account the reduction
claimed is equal to or more than the claim of input tax credit after taking into account the
reduction admitted and discharged on such credit note by the corresponding recipient in his
valid return.

Final acceptance of reduction in output tax liability and communication thereof

(1) The final acceptance of claim of reduction in output tax liability in respect of any tax
period, specified in sub-section (2) of section 43, shall be made available electronically to the
person making such claim in FORM GST MIS-1 through the Common Portal.

(2) The claim of reduction in output tax liability in respect of any tax period which had been
communicated as mis-matched but is found to be matched after rectification by the supplier
or recipient shall be finally accepted and made available electronically to the person making
such claim in FORM GST MIS-1 through the Common Portal.

Communication and rectification of discrepancy in reduction in output tax liability and

reversal of claim of reduction

(1) Any discrepancy in claim of reduction in output tax liability, specified in sub-section (3)
of section 43, and the details of output tax liability to be added under sub-section (5) of the
said section on account of continuation of such discrepancy, shall be made available to the
registered person making such claim electronically in FORM GST MIS- 1 and the recipient
electronically in FORM GST MIS-2 through the Common Portal on or before the last date of
the month in which the matching has been carried out.

(2) A supplier to whom any discrepancy is made available under sub-rule (1) may make
suitable rectifications in the statement of outward supplies to be furnished for the month in
which the discrepancy is made available.

(3) A recipient to whom any discrepancy is made available under sub-rule (1) may make
suitable rectifications in the statement of inward supplies to be furnished for the month in
which the discrepancy is made available.
(4) Where the discrepancy is not rectified under sub-rule (2) or sub-rule (3), an amount to the
extent of discrepancy shall be added to the output tax liability of the supplier and debited to
the electronic liability register and also shown in his return in FORM GSTR-3 for the month
succeeding the month in which the discrepancy is made available.

Explanation 1.- Rectification by a supplier means deleting or correcting the details of an

outward supply in his valid return so as to match the details of corresponding inward supply
declared by the recipient.

Explanation 2.- Rectification by the recipient means adding or correcting the details of an
inward supply so as to match the details of corresponding outward supply declared by the
supplier.

Claim of reduction in output tax liability more than once

Duplication of claims for reduction in output tax liability in the details of outward supplies
shall be communicated to the registered person in FORM GST MIS-1 electronically through
the Common Portal.

Refund of interest paid on reclaim of reversals

The interest to be refunded under sub-section (9) of section 42 or sub-section (9) of section
43 shall be claimed by the registered person in his return in FORM GSTR-3 and shall be
credited to his electronic cash ledger in FORM GST PMT-05 and the amount credited shall
be available for payment of any future liability towards interest or the taxable person may
claim refund of the amount under section 54.

Matching of details furnished by the e-Commerce operator with the details furnished by
the supplier

The following details relating to the supplies made through an e-Commerce operator, as
declared in FORM GSTR-8, shall be matched with the corresponding details declared by the
supplier in FORM GSTR-1-

(a) State of place of supply; and

(b) net taxable value: Provided that where the time limit for furnishing FORM GSTR-1 under
section 37 has been extended, the date of matching of the above mentioned details shall be
extended accordingly:

Provided further that the Commissioner may, on the recommendations of the Council, by
order, extend the date of matching to such date as may be specified therein.

Communication and rectification of discrepancy in details furnished by the ecommerce

operator and the supplier

(1) Any discrepancy in the details furnished by the operator and those declared by the
supplier shall be made available to the supplier electronically in FORM GST MIS-3 and to
the e-commerce operator electronically in FORM GST MIS–4 on the Common Portal on or
before the last date of the month in which the matching has been carried out.

(2) A supplier to whom any discrepancy is made available under sub-rule (1) may make
suitable rectifications in the statement of outward supplies to be furnished for the month in
which the discrepancy is made available.

(3) An operator to whom any discrepancy is made available under sub-rule (1) may make
suitable rectifications in the statement to be furnished for the month in which the discrepancy
is made available.

(4) Where the discrepancy is not rectified under sub-rule (2) or sub-rule (3), an amount to the
extent of discrepancy shall be added to the output tax liability of the supplier in his return in
FORM GSTR-3 for the month succeeding the month in which the details of discrepancy are
made available and such addition to the output tax liability and interest payable thereon shall
be made available to the supplier electronically on the Common Portal in FORM GST MIS–

Annual return

(1) Every registered person, other than an Input Service Distributor, a person paying tax
under section 51 or section 52, a casual taxable person and a non-resident taxable person,
shall furnish an annual return as specified under sub-section (1) of section 44 electronically in
FORM GSTR-9 through the Common Portal either directly or through a Facilitation Centre
notified by the Commissioner: Provided that a person paying tax under section 10 shall
furnish the annual return in FORM GSTR-9A.

(2) Every electronic commerce operator required to collect tax at source under section 52
shall furnish annual statement referred to in sub-section (5) of the said section in FORM
GSTR -9B.

(3) Every registered person whose aggregate turnover during a financial year exceeds two
crore rupees shall get his accounts audited as specified under sub-section (5) of section 35
and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly
certified, in FORM GSTR-9C, electronically through the Common Portal either directly or
through a Facilitation Centre notified by the Commissioner.

Final return Every registered person required to furnish a final return under section 45, shall
furnish such return electronically in FORM GSTR-10 through the Common Portal either
directly or through a Facilitation Centre notified by the Commissioner.

Details of inward supplies of persons having Unique Identity Number

(1) Every person who has been issued a Unique Identity Number and claims refund of the
taxes paid on his inward supplies, shall furnish the details of such supplies of taxable goods
or services or both electronically in FORM GSTR-11, along with application for such refund
claim, through the common portal either directly or through a Facilitation Centre notified by
the Commissioner.

(2) Every person who has been issued a Unique Identity Number for purposes other than
refund of the taxes paid shall furnish the details of inward supplies of taxable goods or
services or both as may be required by the proper officer in FORM GSTR-11.

Provisions relating to a goods and services tax practitioner

(1) An application in FORM GST PCT-01 may be made electronically through the Common
Portal either directly or through a Facilitation Centre notified by the Commissioner for
enrolment as goods and services tax practitioner by any person who:

(a) (i) is a citizen of India;

(ii) is a person of sound mind;

(iii) is not adjudicated as insolvent;

(iv) has not been convicted by a competent court,-

and satisfies any of the following conditions: -

(b) that he is a retired officer of the Commercial Tax Department of any State Government or
of the Central Board of Excise and Customs, Department of Revenue, Government of India,
who, during his service under the Government, had worked in a post not lower in rank than
that of a Group-B gazetted officer for a period of not less than two years; or

(c ) that he has been enrolled as a sales tax practitioner or tax return preparer under the
existing law for a period of not less than five years;

(d) he has passed: (i) a graduate or postgraduate degree or its equivalent examination having
a degree in Commerce, Law, Banking including Higher Auditing, or Business Administration
or Business Management from any Indian University established by any law for the time
being in force; or (ii) a degree examination of any Foreign University recognized by any
Indian University as equivalent to the degree examination mentioned in sub-clause (i); or (iii)
any other examination notified by the Government, on the recommendation of the Council,
for this purpose; or (iv) has passed any of the following examinations, namely.- (a) final
examination of the Institute of Chartered Accountants of India; or (b) final examination of the
Institute of Cost Accountants of India; or (c) final examination of the Institute of Company
Secretaries of India.

(2) On receipt of the application referred to in sub-rule (1), the officer authorised in this
behalf shall, after making such enquiry as he considers necessary, either enrol the applicant as
a goods and services tax practitioner and issue a certificate to that effect in FORM GST PCT-
02 or reject his application where it is found that the applicant is not qualified to be enrolled
as a goods and services tax practitioner.

(3) The enrolment made under sub-rule (2) shall be valid until it is cancelled: Provided that
no person enrolled as a goods and services tax practioner shall be eligible to remain enrolled
unless he passes such examination conducted at such periods and by such authority as may be
notified by the Commissioner on the recommendations of the Council:

Provided further that no person to whom the provisions of clause (c) of sub-section (1) apply
shall be eligible to remain enrolled unless he passes the said examination within a period of
one year from the appointed date.

(4) If any goods and services tax practitioner is found guilty of misconduct in connection
with any proceedings under the Act, the authorised officer may, after giving him a notice to
show cause in FORM GST PCT-03 for such misconduct and after giving him a reasonable
opportunity of being heard, by order in FORM GST PCT -04 direct that he shall henceforth
be disqualified under section 48 to function as a goods and services tax practitioner.

(5) Any person against whom an order under sub-rule (4) is made may, within thirty days
from the date of issue of such order, appeal to the Commissioner against such order.

(6) Any registered person may, at his option, authorise a goods and services tax practitioner
on the Common Portal in FORM GST PCT-05 or, at any time, withdraw such authorisation
in FORM GST PCT-05 and the goods and services tax practitioner so authorised shall be
allowed to undertake such tasks as indicated in the said authorization during the period of
authorisation.

(7) Where a statement required to be furnished by a registered person has been furnished by
the goods and services tax practitioner authorised by him, a confirmation shall be sought
from the registered person over email or SMS and the statement furnished by the goods and
services tax practitioner shall be made available to the registered person on the Common
Portal: Provided that where the registered person fails to respond to the request for
confirmation till the last date of furnishing of such statement, it shall be deemed that he has
confirmed the statement furnished by the goods and services tax practitioner.

(8) A goods and services tax practitioner can undertake any or all of the following activities
on behalf of a registered person, if so authorised by him to:

(a) furnish the details of outward and inward supplies;

(b) furnish monthly, quarterly, annual or final return;

(c) make deposit for credit into the electronic cash ledger;

(d) file a claim for refund; and

(e) file an application for amendment or cancellation of registration:

Provided that where any application relating to a claim for refund or an application for
amendment or cancellation of registration has been submitted by the goods and services tax
practitioner authorised by the registered person, a confirmation shall be sought from the
registered person and the application submitted by the said practitioner shall be made
available to the registered person on the Common Portal and such application shall not be
proceeded with further until the registered person gives his consent to the same.

(9) Any registered person opting to furnish his return through a goods and services tax
practitioner shall-

(a) give his consent in FORM GST PCT-05 to any goods and services tax practitioner to
prepare and furnish his return; and

(b) before confirming submission of any statement prepared by the goods and services tax
practitioner, ensure that the facts mentioned in the return are true and correct.

(10) The goods and services tax practitioner shall-

(a) prepare the statements with due diligence; and

(b) affix his digital signature on the statements prepared by him or electronically verify using
his credentials.

(11) A goods and services tax practitioner enrolled in any other State or Union Territory shall
be treated as enrolled in the State/Union territory for the purposes specified in sub-rule (8).

Conditions for purposes of appearance

(1) No person shall be eligible to attend before any authority as a goods and services tax
practitioner in connection with any proceedings under the Act on behalf of any registered or
unregistered person unless he has been enrolled under rule 24.
(2) A goods and services tax practitioner attending on behalf of a registered or an
unregistered person in any proceedings under the Act before any authority shall produce
before such authority, if required, a copy of the authorisation given by such person in FORM
GST PCT-05.

Refund under GST

Setion 55 reads as under

Refund of tax.— (1) Any person claiming refund of any tax and interest, if any, paid on such
tax or any other amount paid by him, may make an application before the expiry of two years
from the relevant date in such form and manner as may be prescribed:

Provided that a registered person, claiming refund of any balance in the electronic cash ledger
in accordance with the provisions of sub-section (6) of section 49, may claim such refund in
the return furnished under section 39 in such manner as may be prescribed.

(2) A specialised agency of the United Nations Organisation or any Multilateral Financial
Institution and Organisation notified under the United Nations (Privileges and Immunities)
Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons,
as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods
or services or both, may make an application for such refund, in such form and manner as
may be prescribed, before the expiry of six months from the last day of the quarter in which
such supply was received.

(3) Subject to the provisions of sub-section (10), a registered person may claim refund of any
unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other than––

(i) zero rated supplies made without payment of tax;

(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the
rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies
of goods or services or both as may be notified by the Government on the recommendations
of the Council:
Provided further that no refund of unutilised input tax credit shall be allowed in cases where
the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or
services or both avails of drawback in respect of central tax or claims refund of the integrated
tax paid on such supplies.

(4) The application shall be accompanied by—

(a) such documentary evidence as may be prescribed to establish that a refund is due to the
applicant; and

(b) such documentary or other evidence (including the documents referred to in section 33) as
the applicant may furnish to establish that the amount of tax and interest, if any, paid on such
tax or any other amount paid in relation to which such refund is claimed was collected from,
or paid by, him and the incidence of such tax and interest had not been passed on to any other
person:

Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be
necessary for the applicant to furnish any documentary and other evidences but he may file a
declaration, based on the documentary or other evidences available with him, certifying that
the incidence of such tax and interest had not been passed on to any other person.

(5) If, on receipt of any such application, the proper officer is satisfied that the whole or part
of the amount claimed as refund is refundable, he may make an order accordingly and the
amount so determined shall be credited to the Fund referred to in section 57.

(6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case
of any claim for refund on account of zero-rated supply of goods or services or both made by
registered persons, other than such category of registered persons as may be notified by the
Government on the recommendations of the Council, refund on a provisional basis, ninety
per cent. of the total amount so claimed, excluding the amount of input tax credit
provisionally accepted, in such manner and subject to such conditions, limitations and
safeguards as may be prescribed and thereafter make an order under sub-section (5) for final
settlement of the refund claim after due verification of documents furnished by the applicant.
(7) The proper officer shall issue the order under sub-section (5) within sixty days from the
date of receipt of application complete in all respects.

(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall,
instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to—

(a) [refund of tax paid on export of goods or services or both or on inputs or input services
used in making such exports;

(b) refund of unutilised input tax credit under sub-section (3);

(c) refund of tax paid on a supply which is not provided, either wholly or partially, and for
which invoice has not been issued, or where a refund voucher has been issued;

(d) refund of tax in pursuance of section 77;

(e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed
on the incidence of such tax and interest to any other person; or

(f) the tax or interest borne by such other class of applicants as the Government may, on the
recommendations of the Council, by notification, specify.

[(8A) The Government may disburse the refund of the State tax in such manner as may be
prescribed.]

(9) Notwithstanding anything to the contrary contained in any judgment, decree, order or
direction of the Appellate Tribunal or any court or in any other provisions of this Act or the
rules made thereunder or in any other law for the time being in force, no refund shall be made
except in accordance with the provisions of sub-section (8).

(10) Where any refund is due under sub-section (3) to a registered person who has defaulted
in furnishing any return or who is required to pay any tax, interest or penalty, which has not
been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper
officer may—

(a) withhold payment of refund due until the said person has furnished the return or paid the
tax, interest or penalty, as the case may be;
(b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the
taxable person is liable to pay but which remains unpaid under this Act or under the existing
law.

Explanation.––For the purposes of this sub-section, the expression ―specified date‖ shall
mean the last date for filing an appeal under this Act.

(11) Where an order giving rise to a refund is the subject matter of an appeal or further
proceedings or where any other proceedings under this Act is pending and the Commissioner
is of the opinion that grant of such refund is likely to adversely affect the revenue in the said
appeal or other proceedings on account of malfeasance or fraud committed, he may, after
giving the taxable person an opportunity of being heard, withhold the refund till such time as
he may determine.

(12) Where a refund is withheld under sub-section (11), the taxable person shall,
notwithstanding anything contained in section 56, be entitled to interest at such rate not
exceeding six per cent. as may be notified on the recommendations of the Council, if as a
result of the appeal or further proceedings he becomes entitled to refund.

(13) Notwithstanding anything to the contrary contained in this section, the amount of
advance tax deposited by a casual taxable person or a non-resident taxable person under sub-
section (2) of section 27, shall not be refunded unless such person has, in respect of the entire
period for which the certificate of registration granted to him had remained in force,
furnished all the returns required under section 39.

(14) Notwithstanding anything contained in this section, no refund under sub-section (5) or
sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees.

Explanation.—For the purposes of this section,––

(1) ―refund‖ includes refund of tax paid on zero-rated supplies of goods or services or both
or on inputs or input services used in making such zero-rated supplies, or refund of tax on the
supply of goods regarded as deemed exports, or refund of unutilised input tax credit as
provided under sub-section (3).

(2) ―relevant date‖ means—

(a) in the case of goods exported out of India where a refund of tax paid is available in
respect of goods themselves or, as the case may be, the inputs or input services used in such
goods,––

(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which
such goods are loaded, leaves India; or

(ii) if the goods are exported by land, the date on which such goods pass the frontier; or

(iii) if the goods are exported by post, the date of despatch of goods by the Post Office
concerned to a place outside India;

(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is
available in respect of the goods, the date on which the return relating to such deemed exports
is furnished;

(c) in the case of services exported out of India where a refund of tax paid is available in
respect of services themselves or, as the case may be, the inputs or input services used in such
services, the date of––

(i) receipt of payment in convertible foreign exchange [or in Indian rupees wherever
permitted by the Reserve Bank of India]77, where the supply of services had been completed
prior to the receipt of such payment; or

(ii) issue of invoice, where payment for the services had been received in advance prior to the
date of issue of the invoice;

(d) in case where the tax becomes refundable as a consequence of judgment, decree, order or
direction of the Appellate Authority, Appellate Tribunal or any court, the date of
communication of such judgment, decree, order or direction;

(e) [in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to
sub-section (3), the due date for furnishing of return under section 39 for the period in which
such claim for refund arises;

(f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the
date of adjustment of tax after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of goods or services or
both by such person; and

(h) in any other case, the date of payment of tax.

55. Refund in certain cases.— The Government may, on the recommendations of the
Council, by notification, specify any specialised agency of the United Nations Organisation
or any Multilateral Financial Institution and Organisation notified under the United Nations
(Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries and any
other person or class of persons as may be specified in this behalf, who shall, subject to such
conditions and restrictions as may be prescribed, be entitled to claim a refund of taxes paid on
the notified supplies of goods or services or both received by them.

56. Interest on delayed refunds.— If any tax ordered to be refunded under sub-section (5)
of section 54 to any applicant is not refunded within sixty days from the date of receipt of
application under sub- section (1) of that section, interest at such rate not exceeding six per
cent. as may be specified in the notification issued by the Government on the
recommendations of the Council shall be payable in respect of such refund from the date
immediately after the expiry of sixty days from the date of receipt of application under the
said sub-section till the date of refund of such tax:

Provided that where any claim of refund arises from an order passed by an adjudicating
authority or Appellate Authority or Appellate Tribunal or court which has attained finality
and the same is not refunded within sixty days from the date of receipt of application filed
consequent to such order, interest at such rate not exceeding nine per cent. as may be notified
by the Government on the recommendations of the Council shall be payable in respect of
such refund from the date immediately after the expiry of sixty days from the date of receipt
of application till the date of refund.

Explanation.––For the purposes of this section, where any order of refund is made by an
Appellate Authority, Appellate Tribunal or any court against an order of the proper officer
under sub-section (5) of section 54, the order passed by the Appellate Authority, Appellate
Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5).
Timely refund mechanism is essential in tax administration, as it facilitates trade through
release of blocked funds for working capital, expansion and modernization of existing
business. The provisions pertaining to refund contained in the GST law aim to streamline and
standardise the refund procedures under GST regime. Thus, under the GST regime there is a
standardised form for making any claim for refunds. The claim and sanctioning procedure are
completely online and time bound which is a marked departure from the erstwhile time
consuming and cumbersome procedure. Situations leading to refund claims: The relevant date
provision embodied in Section 54 of the CGST Act, 2017, provision contained in Section 77
of the CGST Act, 2017 and the requirement of submission of relevant documents as listed in
Rule 89(2) of CGST Rules, 2017 is an indicator of the various situations that may necessitate
a refund claim. A claim for refund may arise on account of: (a) export of goods or services;
(b) supplies to SEZs units and developers; (c) supply of goods regarded as Deemed Exports;
(d) refund of taxes on purchase made by UN or embassies etc. under Section 55 of CGST
Act, 2017; (e) refund arising on account of judgment, decree, order or direction of the
Appellate Authority, Appellate Tribunal or any court; (f) refund of accumulated Input Tax
Credit on account of inverted rate structure; (g) finalisation of provisional assessment; (h)
refund of pre-deposit; (i) tax paid in excess/by mistake; (j) Refunds to International tourists of
GST paid on goods in India and carried abroad atthe time oftheir departure from India (not
notified yet); (k) refund of tax paid in wrong head under Section 77 of CGST Act, 2017 &
Section 19 of IGST Act, 2017 (treating the supply as intra-State supply which is subsequently
held as inter-State supply and vice versa); (l) refund on account of any other reasons. Thus,
practically every situation is covered. The GST law requires that every claim for refund is to
be filed within 2 years from the relevant date. Treatment for Zero Rated Supplies: One of the
categories under which claim for refund may arise would be on account of exports. All
exports (whether of goods or services) as well as supplies to SEZs have been categorised as
Zero Rated Supplies in the IGST Act, 2017. ―Zero Rated Supply‖ under Section 16 of the
IGST Act, 2017 means any of the following supplies of goods or services or both, namely: (a)
export of goods or services or both; or (b) supply of goods or services or both to a Special
Economic Zone developer or a Special Economic Zone unit. On account of zero rating of
supplies, the supplier is entitled to claim Input Tax Credit in respect of goods or services or
both used for such supplies even though they might be non-taxable or even exempt supplies.
Every person till the date of refund of such tax shall have to be paid to the claimant. It may be
noted that any tax shall be considered to have been refunded only when the amount has been
credited to the bank account of the claimant. Therefore, interest will be calculated starting
from the date immediately after the expiry of sixty days from the date of receipt of the
application till the date on which the amount is credited to the bank account of the claimant.
Accordingly, all tax authorities have been advised to issue the final sanction order in FORM
GST RFD-06 within 45 days of the date of generation of (ARN). Latest Clarification on
Refunds issued by Board: • CBIC vide Circular No. 159/15/2021 dated 20.09.2021 has been
issued clarifying the doubts related to scope of intermediary. Further, Circular No.
161/17/2021 dated 20.09.2021 has been issued clarifying the issue related export of services
with respect to condition no. (v) of Section 2(6) of IGST Act, 2017. Further vide entry at sl.
No. 3 of the table under Circular No. 160/16/2021-GST dated 20.09.2021, the term subjected
to export duty as mentioned in second proviso to Section 54(3) of the CGST Act, 2017 has
been clarified to include only those goods which are actually subjected to export duty i.e. on
which some export duty has to be paid at the time of export thereby excluding the goods on
which the export duty is Nil or which are fully exempt from the export duty. Further, a
Circular No. 173/05/2022-GST dated 06.07.2022 has been issued for clarifying the issue
relating to refund under inverted duty structure where the supplier is supplying goods under
some concessional notification. • The time period from 01.03.2020 to 28.02.2022 would be
excluded for computation of period of limitation for filing refund application under Section
54 or section 55 of the CGST Act, 2017. • Also, a Circular No. 174/06/2022-GST dated
06.07.2022 has been issued prescribing the manner of re-credit in electronic credit ledger
using FORM GST PMT-03A on account of deposit of erroneous refund of unutilised ITC and
refund of IGST obtained in contravention of sub-Rule (10) of Rule 96 of the CGST Rules,
2017. Power with the Commissioner to withhold refund in certain cases: GST law provides
that where an order giving rise to a refund is the subject matter of an appeal or further
proceedings or where any other proceedings under GST Act is pending and the
Commissioner is of the opinion that grant of such refund is likely to adversely affect the
revenue in the said appeal or other proceedings on account of malfeasance or fraud
committed, he may, after giving the taxable person an opportunity of being heard, withhold
the refund in Part A of Form GST RFD-07 till such time as he may determine. Further, once
the reasons for withholding refund no more exist, such withheld refunds may be released by
passing an order in Part-B of Form GST RFD-07.

Refund of unutilised ITC on account of Export of electricity: CGST Rules, 2017 has been
amended vide Notification No. 14/2022-CT dated 05.07.2022 by way of insertion of clause
(ba) in sub-rule (2) of Rule 89 and Statement 3B in FORM GST RFD-01 to provide for filing
of an application of refund of unutilised ITC by an exporter of electricity. Further, Circular
No. 175/07/2022-GST dated 06.07.2022 has been issued to prescribe procedure for filing and
processing of refund of unutilised ITC on account of export of electricity. Single
disbursement authority: Refund amount sanctioned whether under IGST, CGST, SGST and
Cess shall be disbursed either by proper officer of central tax or proper officer of state tax to
whom the tax payer is assigned. The taxpayer need not approach the central/state authority
for disbursal of IGST, CGST & Cess or SGST post sanction of refund by the tax authority to
whom taxpayer is assigned. Where any amount claimed as refund is rejected under Rule 92 of
the CGST Rules, 2017, either fully or partly, the amount debited, to the extent of rejection,
shall be re-credited to the electronic credit ledger by an order made in FORM GST PMT-03
Excess payment of tax to be refunded in cash and as re-credit of ITC: Rule 92 of the CGST
Rules, 2017 has been amended vide Notification No. 16/2020-Central Tax dated 23.03.2020
by inserting sub-Rule (1A) to provide for payment of refund under category excess payment
of tax in cash and re-credit of ITC in electronic credit ledger in the same proportion in which
the outward tax liability was discharged utilising the cash and ITC during the relevant period.
Withdrawal of refund: Rule 90 of the CGST Rules, 2017 has been amended by insertion of
subrule (5) & (6) vide Notification No. 15/2021-Central Tax dated 18.05.2021 to provide for
withdrawal of an application for refund even after issuance of acknowledgement provided
that no further action such as issuance of provisional/ final refund sanction order or notice for
rejection of refund has been taken on the subject refund claim by the proper officer. On
submission of application for withdrawal of refund claim, the amount debited by the
applicant would be re-credited to the ledger from which the amount was debited while filing
the refund claim.

Grant of provisional refund in case of zero rated supplies: GST law also provides for grant of
provisional refund of 90% of the total refund claim, in case the claim relates for refund
arising on account of zero rated supplies. The provisional refund would be paid within 7 days
after giving the acknowledgement. The acknowledgement of refund application is normally
issued within a period of 15 days. The provisional refund would not be granted to such
supplier who was, during any period of five years immediately preceding the refund period,
was prosecuted where the amount of tax evaded exceeds R 250 Lakh. Payment of wrong tax:
Under GST it might happen that the taxable person may pay integrated tax instead of central
tax plus state tax and vice versa because of incorrect application of the place of supply
provisions. In such cases, while making the appropriate payment of tax, interest will not be
charged and the refund claim of the wrong tax paid is provided. Accordingly, Rule 89(1A)
has been inserted in CGST Rules, 2017 vide Notification No. 35/2021-Central Tax dated
24.09.2021 to prescribe the manner and time period for filing such claim. Further, a Circular
No. 162/18/2021-GST dated 25.09.2021 has been issued clarifying the issues pertaining to
refund of tax paid in wrong head under Section 77 of CGST Act, 2017 and Section 19 of
IGST Act, 2017. Claim by a person who has borne the incidence of tax: Any tax collected by
the taxable person more than the tax due on such supplies must be credited to the
Government account. The law makes explicit provision for the person who has borne the
incidence of tax to file refund claim in accordance with the provisions of Section 54 of CGST
Act, 2017.

Refunds to casual/non-resident Taxable Persons: A casual/Non-resident Taxable Person has

to pay tax in advance at the time of registration. Refund may become due to such persons at
the end of the registration period because the tax paid in advance may be more than the actual
tax liability on the supplies made by them during the period of validity of registration period.
The law envisages refund to such categories of taxable persons also. But the amount of
excess advance tax shall not be refunded unless such person has filed all the returns due
during the time their registration was effective. It is only after such compliance that refund
will be granted.

GST Audit

The objective of the audit is to ensure compliance with the provisions of the GST law,
including accuracy of tax returns, payment of taxes, and other legal requirements that require
the taxpayer to cooperate on information and documentation enforce all relevant information
that the tax authorities may provide.

As per Section 2(13) of the CGST Act, the term ―Accounts‖ is defined as records, returns,
and other documents maintained or submitted by a person registered under this Act for the
purposes of

 Reported Turnover
 Taxes
 Refunds
The input tax credit is applied, and a thorough checking of compliance with all the provisions
mentioned in this Act or the rules is established thereunder.

Types of Audits under GST

Departmental Audits/Audits by the Tax Department:

Departmental audits, also known as audits conducted by tax authorities, are routine checks
conducted by tax authorities. These audits are designed to account for and meet tax
obligations accurately, and to empower tax authorities to examine records maintained by
taxpayers. As per Section 65 of the GST Accounts Act and Rule 101(3), the Commissioner or
their authorized officer may conduct audits and verify registered persons‘ ‗records‘ and
‗books of accounts‘. These audits are carried out by authorized personnel and the police
force.

On completion of the audit procedure, the Authorized Commissioner shall communicate the
findings, rights and obligations, and the reasons thereafter to the registered taxpayer within
30 days through FORM GST ADT-02. Suppose discrepancies such as unfair returns or use of
Investment Tax Credit (ITC) in the calculation are discovered. In that case, the authorized
officer may initiate the proceedings in accordance with the procedures mentioned in Section
73 or Section 74.

Statutory Audit:

As per Section 35(5) of the GST Audit Rules, a registered taxpayer whose total income
exceeds Rs. 2 crore in a financial year requires its books of accounts and returns to be audited
by a professional chartered accountant. These audited accounts and certified copies of these
reconciliation details should be submitted through Form GSTR 9C through the common
portal or through the convenience point designated by the Commissioner. However, with
effect from July 30, 2021, the government indicated that the GST audit and certification by
CA/CMA will be withdrawn. Therefore, taxpayers must file their certified GSTR 9C from
FY 20-21.

Special Audit:
As per section 66 and Rule 102 of GST Audit Rules, an authorized officer (not below the
rank of Assistant Commissioner) at any stage of scrutiny, inquiry, or investigation may avail
the services of a CA or CMA by considering the nature & complexity of the business and if
the authorized officer believes that:

1. The value declared is incorrect, or

2. The credit availed is outside the normal limits.

The authorized officer shall issue the direction for the special audit of GST in Form GST
ADT-03, wherein the registered dealer shall be required to get his records, including his
books of accounts, to be examined and audited by the specified professional CA or CMA
within ninety days from the day of passing such an order.

Limited scrutiny:

A limited audit is conducted in specific cases where the tax authorities suspect non-
compliance with the provisions of the GST laws. The objective of limited scrutiny is to verify
compliance with the provisions of the GST law, including the correctness of the tax returns
filed, payment of tax, and compliance with other provisions of the law.

Taxpayer-Initiated Audit:

The taxpayer himself can initiate an audit. The objective of a taxpayer-initiated audit is to
verify compliance with the provisions of the GST law, including the correctness of the tax
returns filed, a charge of tax, and compliance with different provisions of the regulation.

The GST regulation presents several results of non-compliance with the regulation‘s
provisions, including fines, penalties, and imprisonment. Therefore, taxpayers need to
comply with the GST law‘s provisions, including the audits‘ provisions.

Taxpayers are warned to keep correct and complete statistics of their business transactions,
including invoices, receipts, and other helpful files, to ensure compliance with the provisions
of the GST regulations; taxpayers are suggested to report their tax returns on a well-timed
basis and pay their tax on time.

Importance and Benefits of Different Audits under GST

GST (Goods and Services Tax) audit holds sizeable significance in the realm of taxation and
commercial enterprise compliance for several reasons:

Compliance Verification:

GST audit serves as a mechanism to confirm corporations‘ compliance with GST laws and
guidelines. It guarantees that companies adhere to the prescribed suggestions for tax
calculation, fees, and reporting.

Accuracy in Transactions:

The audit method confirms the accuracy of transactions recorded by way of agencies. It is
essential for retaining transparency and reliability in financial reporting. Correct recording of
transactions ensures timely payment of GST.

Timely GST Payments:

A Timely charge of GST is essential for the easy functioning of the tax device and the
government‘s revenue series. The audit facilitates confirming that organizations are making
their GST payments on time, contributing to the general efficiency of the tax gadget.

Maximising Profits and Efficiency:

Through the audit, groups can identify areas wherein operational and economic
improvements can be made. It may need to contain optimizing strategies, lowering mistakes,
and ensuring that the to-be-had enter tax credits are applied correctly. As a result, agencies
can maximize their earnings and streamline their operations.

Fraud Detection and Prevention:

One of the vital uses of GST audits is detecting and preventing fraudulent activities. By
analysing economic information and transactions, auditors can perceive any tries to steer
clear of taxes or engage in fraudulent practices. This saves the authorities from sales loss and
protects compliant corporations from unfair competition.

Legal Compliance:
GST audit ensures that agencies observe the criminal requirements set forth by tax
authorities. Non-compliance can result in consequences or even prison.

Section 65. Audit by tax authorities.—

(1) The Commissioner or any officer authorised by him, by way of a general or a specific
order, may undertake audit of any registered person for such period, at such frequency and in
such manner as may be prescribed.

(2) The officers referred to in sub-section (1) may conduct audit at the place of business of
the registered person or in their office.

(3) The registered person shall be informed by way of a notice not less than fifteen working
days prior to the conduct of audit in such manner as may be prescribed.

(4) The audit under sub-section (1) shall be completed within a period of three months from
the date of commencement of the audit:

Provided that where the Commissioner is satisfied that audit in respect of such registered
person cannot be completed within three months, he may, for the reasons to be recorded in
writing, extend the period by a further period not exceeding six months.

Explanation.––For the purposes of this sub-section, the expression ―commencement of

audit‖ shall mean the date on which the records and other documents, called for by the tax
authorities, are made available by the registered person or the actual institution of audit at the
place of business, whichever is later.

(5) During the course of audit, the authorised officer may require the registered person,—

(i) to afford him the necessary facility to verify the books of account or other documents as
he may require;

(ii) to furnish such information as he may require and render assistance for timely completion
of the audit.
(6) On conclusion of audit, the proper officer shall, within thirty days, inform the registered
person, whose records are audited, about the findings, his rights and obligations and the
reasons for such findings.

(7) Where the audit conducted under sub-section (1) results in detection of tax not paid or
short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper
officer may initiate action under section 73 or section 74.

Section 66. Special audit.—

(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any
officer not below the rank of Assistant Commissioner, having regard to the nature and
complexity of the case and the interest of revenue, is of the opinion that the value has not
been correctly declared or the credit availed is not within the normal limits, he may, with the
prior approval of the Commissioner, direct such registered person by a communication in
writing to get his records including books of account examined and audited by a chartered
accountant or a cost accountant as may be nominated by the Commissioner.

(2) The chartered accountant or cost accountant so nominated shall, within the period of
ninety days, submit a report of such audit duly signed and certified by him to the said
Assistant Commissioner mentioning therein such other particulars as may be specified:

Provided that the Assistant Commissioner may, on an application made to him in this behalf
by the registered person or the chartered accountant or cost accountant or for any material
and sufficient reason, extend the said period by a further period of ninety days.

(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of
the registered person have been audited under any other provisions of this Act or any other
law for the time being in force.

(4) The registered person shall be given an opportunity of being heard in respect of any
material gathered on the basis of special audit under sub-section (1) which is proposed to be
used in any proceedings against him under this Act or the rules made thereunder.
(5) The expenses of the examination and audit of records under sub-section (1), including the
remuneration of such chartered accountant or cost accountant, shall be determined and paid
by the Commissioner and such determination shall be final.

(6) Where the special audit conducted under sub-section (1) results in detection of tax not
paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the
proper officer may initiate action under section 73 or section 74.