GST has the provision of self assessment which facilitates payment of taxes and compliance. The GST model law also explains recovery and demand provisions along with notices, when returns are not filed, or the taxes are either paid short or not paid.
Under GST audit is nothing but an examination of maintained records by the business/ person which helps in verification of information declared being correct. It also verifies the compliance and payment of taxes in full. Audit can be done by the tax authorities or by the taxpayer himself.
As per described by the law, for taxpayers where the annual turnover crosses the prescribed limit of 1 crore, the business needs to be audited by a CA or CMA.
This audit is conducted by the authorities authorized by the commissioner of SGST/ CGST.
A special audit may be started if the tax authorities give opinion that a wrong credit has been availed or the value has not been declared correctly. This audit can be initiated at any point of time during the investigation if the need is felt by the authority.
It means determination of tax liability under GST which covers
Under GST a person can file a return for a particular period personally by himself and assess the payable tax on his own.
An officer can be requested by the taxpayer for the purpose of provisional assessment if the taxpayer is himself not able to determine the value of tax. On proper investigation, the officer can tell the taxpayer to pay the tax on provisional basis as specified by him.
The correctness of return can be verified by the proper officer after scrutiny. If any discrepancies are noticed in the returns, the office may ask for explanations.
Assessment of Non Filers
Even after getting a notice, if a registered taxpayer doesn’t file the return, the taxpayer is judged for tax liability by the proper officer to the best of his judgment with the relevant material and data that is available with him.
This head is related to the persons who even after being liable for registration do not register themselves under GST. The officer will assess such a person to best of his knowledge/ judgment. A show cause notice will be given to the taxpayer.
This can be done by the officer if he comes across sufficient grounds that make him believe that any delay display of tax liability may harm interest of revenue. In order to protect that interest, he can pass such an assessment with the permission of the joint or additional commissioner.
As the concept of GST is at primary stage and very new to the public, being payable on self assessment, there are chances that the taxable person has made errors which include short payment or even non-payment of tax. In these cases, the provisions of demand and recovery may become applicable.
The authorized officer will issue show cause notice along with the demand of payment of tax amount due. The demand may arise in following cases:
The IT department can start recovery if demand is not paid.
When individuals and corporations request for clarification of certain tax matters, the tax authorities issue advance ruling. Such a ruling is applied for the proposed activity being before started. It helps reducing litigation. As per the law, it is a written decision of the tax authorities given to an applicant for questions relating to the supply of goods or services.
