CGST Act · Chapter XII
Assessment
s. 59Self-assessment
Section 59 states the basic rule of GST: the taxpayer assesses its own tax. The department does not assess routinely; it scrutinises, audits and investigates, and determines tax only where the self-assessment is shown to be wrong.
- Under section 59 of the CGST Act, 2017 every registered person self-assesses the tax payable under the Act and furnishes a return for each tax period under section 39.
- Self-assessment is the starting point for scrutiny (section 61), audit (sections 65–66) and demands (sections 73, 74 and 74A); best-judgment and summary assessments (sections 62–64) are the exceptions.
- Because the return is the taxpayer's own assessment, errors are corrected forward in later returns, not by reopening past ones (section 39(9); Union of India v Bharti Airtel, SC 2021).
s. 60Provisional assessment
Section 60 helps a taxpayer that genuinely cannot work out the value of a supply or the rate of tax. On request, the officer lets it pay tax provisionally against a bond, and later fixes the final liability; the difference is paid with interest or refunded.
- Under section 60(1) of the CGST Act, 2017 a taxable person unable to determine the value or rate of tax may request provisional assessment; the officer must pass an order within ninety days allowing payment on a provisional rate or value.
- The taxpayer must execute a bond, with such surety or security as the officer thinks fit, for any difference on final assessment (section 60(2)); Rule 98 caps the security at 25% of the bond amount.
- The final assessment must be made within six months of the provisional order, extendable by a Joint or Additional Commissioner by six months and by the Commissioner up to four years more (section 60(3)).
- Tax found short carries interest from the original due date (section 60(4)); a refund carries interest under section 56, subject to the unjust-enrichment rule (section 60(5)).
s. 61Scrutiny of returns
Section 61 lets the officer examine a return, point out discrepancies and ask for an explanation. If the explanation is accepted, that ends the matter; if not, the officer may audit, investigate or raise a demand. It is a check on the self-assessment, not an assessment in itself.
- Under section 61(1) of the CGST Act, 2017 the proper officer may scrutinise a return and related particulars and inform the registered person of discrepancies, seeking an explanation (Form GST ASMT-10, Rule 99).
- If the explanation is acceptable, the person is informed (ASMT-12) and no further action is taken on it (section 61(2)).
- If no satisfactory explanation is given within thirty days, or an accepted discrepancy is not corrected, the officer may proceed to audit, special audit, inspection or search, or a demand under section 73, 74 or 74A (section 61(3)).
- The Andhra Pradesh and Allahabad High Courts have held that scrutiny is not a condition precedent to a demand resting on other information (Devi Traders, 2023; Neelkanth Entrepreneurs, 2026). The Gauhati High Court has held the section 61 procedure mandatory where a demand rests on a discrepancy in the returns (Pepsico India Holdings, 2025, single judge; the department's appeal is pending).
- Once the explanation has been accepted, a demand on the same discrepancy cannot be raised (Goverdhandham Estate v State of Rajasthan, 2024).
s. 62Assessment of non-filers
Section 62 deals with registered persons who do not file returns. After a notice under section 46, the officer may assess the tax on the best of his judgment. The assessment is a prompt rather than a final word: if the taxpayer files a valid return within the time allowed, the order falls away.
- Under section 62(1) of the CGST Act, 2017, notwithstanding sections 73, 74 and 74A, where a registered person fails to file a return under section 39 or 45 even after a notice under section 46, the proper officer may assess the tax to the best of his judgment on the material available.
- The order must be issued within five years from the due date of the annual return for the year concerned.
- If a valid return is filed within sixty days of service of the order (thirty days before 01.10.2023), the order is deemed withdrawn; from 01.10.2023 it may be filed within a further sixty days on payment of an additional late fee of Rs. 100 a day.
- Interest under section 50(1) and late fee under section 47 remain payable even if the order is withdrawn.
s. 63Assessment of unregistered persons
Section 63 reaches those outside the return system: persons who should have registered but did not, and persons whose registration was cancelled by the officer but who remained liable to tax. The officer may assess them on best judgment, after a hearing.
- Under section 63 of the CGST Act, 2017, notwithstanding sections 73, 74 and 74A, the proper officer may assess to the best of his judgment a taxable person who failed to register though liable, or whose registration was cancelled under section 29(2) but who was liable to pay tax.
- The order must be issued within five years from the due date of the annual return for the year to which the unpaid tax relates.
- No order may be passed without giving the person an opportunity of being heard (proviso); the procedure is a notice in Form ASMT-14 and an order in ASMT-15 (Rule 100(2)).
s. 64Summary assessment
Section 64 is an emergency power. Where evidence shows a tax liability and waiting for the normal procedure would put the revenue at risk, the officer may assess at once, with senior approval. If the order turns out to be wrong, it can be withdrawn and the matter taken through the ordinary demand procedure.
- Under section 64(1) of the CGST Act, 2017 the proper officer may, with the previous permission of an Additional or Joint Commissioner, assess a person's tax liability on evidence that comes to his notice, if he has sufficient grounds to believe that delay may adversely affect the revenue.
- Where the taxable person cannot be ascertained and the liability relates to goods, the person in charge of the goods is deemed to be the taxable person (proviso).
- On the taxpayer's application within thirty days, or on his own motion, the Additional or Joint Commissioner may withdraw an erroneous order and direct proceedings under section 73, 74 or 74A (section 64(2)).