Gulbarga University, Kalaburagi

GST Returns, Assessment & Penal Provisions

GST Returns - Meaning:
GST returns are the documents providing data to the Government. Process of filing return is
the mechanism of communicating data to the Government. A return is a document containing details
of inward and outward supply of goods/services which a taxpayer is required to file with the tax
administrative authorities. This is used by tax authorities to calculate tax liability. GST law provides
the various kinds of returns that are to be submitted by different kinds of tax payers.
Every registered person is required to file a return. A registered person has to file returns
either on monthly or quarterly basis. An Input Service Distributor (ISD) has to file monthly returns
showing details of credit distributed during a particular month. A person required to deduct tax
(TDS) and a person required to collect tax (TCS) has to file monthly returns showing the amount
deducted/collected. A non-resident taxable person has to file returns for the period of activity in
India.

GSTR-1: Outward Supplies:

In Form GSTR -1 details of outward supplies of both goods and services are required to be
furnished. Every registered taxable and casual taxable person has to furnish details of outward
supplies except for Input service distributor, non-resident taxable person, composition taxpayer, tax
deductor, E-commerce operator (Tax Collector) and supplier of OIDAR service to a non- taxable
online recipient.
Within 10th day of the succeeding month, GSTR-1 containing details of invoices, debit notes, credit
notes and revised invoices issued in relation to outward supplies is to be filed. GSTR-1 cannot be filed
from 11th day to 15th day of the month succeeding the tax period. Maximum time limit for
amendments-
• Date of filing of monthly return for the month of September following the end of the financial
year to which such details pertain [i.e., 20th October of the next financial year]
• Date of filing of the relevant annual return
Whichever is earlier.

GSTR-2: Inward Supplies:

Form GSTR-2 contains details of inward supplies of both goods and services and credit and
debit notes. All registered persons except for Input service distributor, non resident taxable person,
Composition taxpayer, tax deductor, E- Commerce Operator (Tax collector), Supplier of OIDAR
service are required to furnish this statement of inward supplies in Form GSTR 2. In Form GSTR-1,
the supplier uploads the details and the recipient can match the same with his inward supply. In Part
‘A’ of Form 2A, details which are uploaded by the supplier are made available to the recipient. Part
‘B’ of Form GSTR-2A provides details of TDS and TCS. In GSTR-2, recipient can accept, reject, modify,
add or mark it pending the said details and can also complete the GSTR-2 using the same details. The
recipient can make any modification, deletion to details made available in Form GSTR-2A. He can
also make any addition to Form GSTR-2. After making whatever changes the recipient likes, the
supplier can either accept or reject them in Form GSTR-1A. After accepting or rejecting, the supplier
would amend Form GSTR-1, and accordingly the effect of accepting or rejecting would impact the

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 1
supplier’s output tax liability. For a particular month, GSTR- 2 is filed on or after 11th day but on or
before the 15th day of the immediately succeeding month.

Mandatory Furnishing of Returns:

Even though there are no transactions effected in any tax period, the registered person
(including SEZ unit or developer), has to file a “NIL RETURN”.

Annual Return:
A person is required to file an annual return by 31st December of next Financial year. Except
for casual taxable person, non-resident person, input service distributors and persons authorized to
deduct or collect tax at source u/s 51 or 52, every registered taxable person is required to file an
annual return under the law. Along with the Annual Return, a copy of audited annual accounts and a
reconciliation statement, duly certified, in prescribed form must be furnished electronically through
the common portal by every registered person whose accounts are audited as per CGST Act.

Final Return:
Any person who is required to furnish return and whose registration has been cancelled
should furnish a final return within 3 months from the date of cancellation or date of order of
cancellation, whichever is later.

Notice to Defaulters:
Notice should be issued to the registered person who has not furnished Normal return or
Annual return or Final return, requiring him to furnish such return within 15 days.

Levy of Later Fees:

For late filing of return, late fee is as specified below:
Returns Late Filing Fees
All returns except Annual • Rs. 25 per day per act in case of Norma Return
Return • Rs. 10 per day per act in case of NIL Return
Subject to Maximum of Rs. 5,000
Annual Return Rs. 100 per day per act up to a maximum of 0.25% of the
turnover of the state

Following are the different kinds of returns prescribed under the GST Law.
Form Particulars Frequency Applicable to Due Date
GSTR-3B Summary Return: Simple Monthly All registered 20thof the next
Return in which summary of persons (other than month
outward supplies along with Input Service
Input Tax Credit is Distributor (ISD) and
declared and payment of tax a person liable to
is affected by taxpayer deduct TDS and
collect TCS)
GSTR-1 Outward Supplies: Details of Monthly Normal / Regular 10th of the next
outward supplies of taxable Taxpayer month
goods and/or services
affected
GSTR-2 Inward Supplies: Details of Monthly Normal / Regular 15th of the next
inward supplies of taxable Taxpayer month
goods and/or services

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 2
 affected claiming the input tax
credit.
GSTR-3 Monthly return: Monthly Monthly Normal / Regular 20th of the next
return on the basis of Taxpayer month
finalization of details of
outward supplies and inward
supplies along with the
payment of tax.
GSTR-4 Return for a taxpayer Quarterly Composition 18th of the month
registered under the taxpayer succeeding the
composition levy quarter
GSTR-5 Return by non-resident tax Monthly Non-Resident taxable 20th of the next
payers [foreigners]: person month
GSTR-5A Return by Online information Monthly Online information 20th of the next
and database access or and database access month
retrieval services (supply to a or retrieval services
person other than a registered
person i.e., online non-taxable
recipient)
GSTR-6 Return by input service Monthly Input Service 13th of the next
distributors (ISD) Distributor month
GSTR-7 Return for TDS: Return for Monthly Tax Deductor 10th of the next
authorities deducting tax at month
source.
GSTR-8 Return for TCS: Details of Monthly E-Commerce 10th of the next
supplies effected through e- Operator month
commerce operator and the
amount of tax collected
GSTR-9 Annual Return Annually Normal tax payer 31st December of
(other than casual taxthe next Financial
payer) Year
GSTR-9A Return by Composition Annually Composition 31st December of
Supplier taxpayer the next Financial
Year
GSTR-9C Return along with the copy of Annually Normal tax payer 31st December of
audited annual accounts and a having aggregate the next Financial
reconciliation statement turnover of more Year
than Rs 2 crores
GSTR-10 Final Return One time Registered Person Within 3 months
i.e. Last whose registration of the date of
return has been cancelled cancellation or
date of order of
cancellation,
whichever is later
GSTR-11 Return to be filed by a person Monthly Person having UIN 28th of the month
having UIN (Unique Identity following the
Number) w.r.t inward month for which
supplies received by him to statement is filed
file refund of the taxes paid by
him on inward supplies.
Note: Above due dates have been extended from time to time.

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 3
GST Assessment:
Assessment is the process of determining the amount of tax liability under the GST. Various
types of assessments such as self-assessment, provisional assessment, scrutiny, assessment of non-
filers, assessment of unregistered persons and summary assessment, are conducted, depending on
the circumstances of each case. Section 2(11) of the CGST Act, defines “assessment” means
determination of tax liability under this Act and includes self-assessment, re-assessment, provisional
assessment, summary assessment and best judgement assessment. The CGST Act contemplates the
following types of Assessments:
Section Type of Assessment
Sec 59 Self Assessment
Sec 60 Provisional Assessment
Sec 61 Scrutiny of returns filed by registered taxable persons
Sec 62 Assessment of non-filers of returns
Sec 63 Assessment of unregistered persons
Sec 64 Summary Assessment in certain special cases

Self Assessment (Sec 59):

Every registered taxable person shall self assess the taxes payable under this Act and furnish a return
for each tax period as specified under Section 39. Self-assessment means an assessment by the
registered person himself and not an assessment conducted or carried out by the Proper Officer. The
GST regime continues to promote the scheme of self-assessment. Hence, every registered person
would be required to assess his tax dues in accordance with the provisions of GST Act and report the
basis of calculation of tax dues to the tax administrators, by filing periodic tax returns.

Provisional Assessment (Sec 60):

Provisional assessment can be availed in the following situations:
i. When a taxable person is unable to determine the Value of goods or services - viz, there is
a difficulty in ascertaining:
a. Transaction value to be adopted for determination of tax payable; e.g. open market
value to be determined, where consideration is not wholly in money or where supplier
enters into cost plus contract with the buyer.
b. Inclusion or exclusion of any amounts in the value of supply; e.g. as per pre existing
agreement certain percentage of discount to be allowed to buyer depending upon the
buying targets achieved by them.
c. Existence of any circumstance causing failure of transaction value declared e.g. where
the supplier is concerned whether the price of the supply can be regarded as the sole
consideration for the supply, if the supply has been effected based on a certain promise
made by the recipient, for which the monetary value is indeterminable.
ii. Rate of tax applicable on the supply cannot be determined by the taxable person, viz there
is difficulty in ascertaining:
a. Classification of the goods and / or services under the relevant Schedule;
b. Eligibility to any exemption notification u/s 11 or compliance with conditions
associated with such exemption.
c. Applicability of any abatement/deduction in rate of tax to the assesse u/s 9 or
compliance of conditions associated with such abatement.

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 4
Scrutiny of Returns (Sec 61):
Section 61 deals with the powers vested in the proper officer to scrutinize the returns filed by
registered persons with a view to verifying the correctness of the return. In legal parlance, it is
considered to be a pre-adjudication process.
Step 1: Discrepancy Notice
After scrutiny Proper Officer is required to inform the registered person of the discrepancies. Notice
informing discrepancies shall afford a time period not exceeding 30 days from the date of service or
further period as may be permitted by Proper Officer. Where possible discrepancy notice shall
specify the amount of tax, interest and any other amount payable in relation to the discrepancy
Step 2: Acceptance/Explanation of Discrepancy
Registered person may accept the discrepancy and pay the tax, interest and other amount arising
from such discrepancy and inform the same. Registered person may furnish explanation for
discrepancy. If explanation of registered person is acceptable, he shall be informed and no further
action shall be taken in this regard. If explanation of registered person is acceptable, he shall be
informed.
Step 3: Actions that may be taken after scrutiny of returns
If no explanation is offered in 30 days or further permitted period of being informed about
discrepancy or accepted tax is NOT PAID, proper officer may take any of following actions against
registered person after scrutiny of returns:
- Audit by tax authorities
- Inspection, search and seizure
- Special audit by nominated CA/CMA
- Show cause notice for Determination of tax not paid or short paid or erroneously refunded or
wrong claim of ITC.

Assessment of non-filers of returns (Sec 62):

Section 62, commences with a non obstante clause, meaning whenever the provisions of section 73
or 74 applies, the provisions of section 62 of the Act cannot be invoked. However, the provisions of
section 62 can be invoked only in case of registered taxable persons who have failed to file returns,
as required, under section 39 or as the case may be, or final return on cancellation of registration
under section 45 of the Act. Issuance of notice under section 46 appears to be a pre-condition for
initiating proceedings under Section 62 of the Act. However, Section 62 cannot be invoked for non-
filing GSTR-1, GSTR-2 and GSTR-9.
Best Judgment Assessment: The Proper Officer may proceed to assess tax liability of registered
person who fails to furnish return to the best of his judgment. Best judgement assessment order has
to be passed within 5 years from the date specified u/s 44 for annual return of the financial year to
which tax not paid relates. Best Judgment assessment order for non-filers assessment to be made in
ASMT13.
Withdrawal of Assessment: Where a valid return is filed within 30 days from the date of service of
best judgement assessment order, best judgment assessment shall be deemed to have been
withdrawn.

Assessment of Unregistered Person (Sec 63):

The provisions of assessment of unregistered persons apply to only those persons who are liable to
obtain registration but fail to do so. The provisions of assessment of unregistered persons also apply
Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 5
to those unregistered persons whose registration has been cancelled u/s 29(2) by proper officer due
to:
- Contravention of act or rules
- Registration obtained by fraud, wilful misstatement or suppression of facts but he was liable
to pay tax
- Not commencing business within 6 months from the date of voluntary registration
- Composition taxable person not filing return for 3 consecutive tax periods
- Normal taxable person not furnishing returns for continuous period of 6 months
Best Judgment Assessment: Best judgment assessment order has to be passed within 5 years from
the date specified u/s 44 for annual return of the financial year to which tax not paid relates. No best
judgment assessment order shall be passed without giving the taxable person an opportunity of
being heard. Notice mentioning the grounds for best judgment assessment shall be given. Time
period of 15 days shall be given to reply to Show Cause Notice for best judgment assessment order
of unregistered person. Best Judgment assessment order shall be made in ASMT-15.
Summary Assessment (Sec 64):
The word “summary assessment” is generally used in a tax legislation to denote ‘fast track
assessment’ based on return filed by the assessee. It allows the Tax Officer to make prima facie
adjustments based on errors or factors based on the available information without an occasion for
calling for further information from an assessee or inspecting his records. In the GST Act, it is used
to denote those assessments which are completed ex-parte and on priority basis when there is
reason to believe that there will be loss of tax revenue, if such assessment is delayed. This provision
is only the first step in invoking the machinery provided to enforce recovery of dues from potential
defaulters, and this requires an assessment of the tax liability. Such amounts are commonly known
as protective an assessment which in a sense protects Government revenue. This section pre-
supposes the fact that the proper officer must be in possession of sufficient grounds to believe that
any delay will adversely affect revenue.

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 6
Penal Provisions:
Effective implementation of any law requires strict action against the defaulters. To ensure
proper implementation of the GST law and to prevent tax evasion and corruption, the government
has prescribed fees, interest and penalties. Various kinds of penalties have been prescribed by the
government for different types of offences committed by a taxable person. This chapter covers
penalties imposed for violation of laws under the GST.
The CGST Act describes penalties for various specified offences committed by a person as under:
Nature of Offence Prescribed Penalty
A taxable person Higher of the following:
• Supplies any goods without invoice or incorrect invoice Rs. 10,000
• Issues invoice without supply of goods or
• Collects tax but does not pay within 3 months of the due date An amount equivalent to the
• Fails to deduct or collect tax or fails to pay it to the government amount of tax evaded
• Takes input tax credit without actual receipt of goods
• Obtains refund by fraud
• Manipulates financial records
• Gives false information/return
• Takes or distributes ITC in violation of the ISD provisions
• Fails to get registered even though liable to do so
• Transports taxable goods without documents
• Fails to maintain books of accounts or any other documents
• Fails to provide information and documents demanded by any
officer or
• Furnishes false information or documents during any
proceedings
• Prevents an officer from discharging duty
• Supplies, transports or stores goods which are liable for
confiscation
• Does not disclose turnover leading to evasion of tax
• Issues invoices or document by using the registration number
of another person
• Tampers or destroys any material evidence or document
• Disposes or tampers goods detained, seized or attached etc.
If non-payment of tax is a) Higher of following:
(a) Not due to fraud or intentional error/omission Rs. 10,000 or 10% of tax due
(b) Due to fraud or intentional error/omission b) Higher of the following:
Rs 10,000 or amount of tax
due
• Applicable to any person who helps in causing certain offences Up to Rs. 25,000
• Who keeps or deals with goods which are to be confiscated
• Deals in services in violation of the GST law
• Fails to appear before the GST officer when called;
• Fails to issue invoice or account for it
Failure to furnish information return Rs. 100/day with maximum
penalty of Rs. 5,000
General Penalty for any violation not listed above Up to Rs. 25,000
Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 7
General rules for imposition of penalty:
• No penalty would be applicable for minor violation of tax law where tax involved < Rs. 5000
• No penalty for omission or mistake in documentation which can be easily rectified
• Penalty would be dependent on facts and circumstances of each case and severity of violation
• No penalty without giving an opportunity of being heard
• Officer to specify the nature of breach and the applicable law, regulation or procedure
• If a person voluntarily discloses the breach, then his penalty may be lower as compared to when
the officer finds it out
• The lower penalty would not be applicable where the penalty is prescribed under the Act as
either a fixed sum or expressed as a fixed percentage

Confiscation of goods or conveyance:

All goods or conveyances should be liable to confiscation if a person:
• Supplies / receives goods with the intention to evade tax
• Does not account for goods on which he is liable to pay tax
• Supplies goods liable to tax without registration
• Violates the law with intent to evade the payment of tax
• Uses conveyance to transport goods which is in violation of the law

Punishment for certain offences:

Offences such as:
1. Supply of goods without issuance of invoice,
2. issuance of bill without supply,
3. wrongly availment of ITC without receiving actual supply,
4. collects taxes but fails to pay within 3 months from the due date of payment
5. Evades tax, fraudulently avails ITC or refund,
6. Manipulates financial records or
7. Gives false information/return with intent to evade tax
8. prevents any officer from discharge of duties,
9. acquires or deals in goods liable to confiscation,
10. receives/concerned with services in contravention,
11. fails to supply false information,
12. destruction of material evidences, etc.,
13. attempting to commit or abetting commission of offence given above

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 8
 Period of Maximum
Nature of Offence Amount Involved Imprisonment and
Fine
Exceeds Rs 1 crores but upto Rs 2
Tax evaded or Input Tax 1 year and fine
crores
Credit wrongly taken or Exceeds Rs 2 crores but upto Rs 5
utilized, or refund wrongly 3 year and fine
crores
taken
Exceeds Rs 5 crores 5 years and fine
Helps in commission of
6 months or fine or both
certain offences
For subsequent offence No limit 5 years and fine

 Without any specific reason recorded by the Court, the term of imprisonment is not to be less
than 6 months.
 All offences are non-cognizable and bailable except in the cases where tax evasion is more than
Rs. 500 Lakhs.
 A person is not to be prosecuted without the previous sanction of the Commissioner.

*****

Prof. C. S. Basavaraj, PG Dept of Studies & Research in Commerce, Gulbarga University. Page | 9