Published 13 October 2026
The first sign of a section 63 assessment is often an SMS with a fifteen-character number ending in “TMP” and a password. The person may never have registered, believing the turnover was below the threshold or the supply exempt. Or the department may have cancelled the registration, and the business carried on trading. Either way the department has found turnover, often in e-way bills, TDS returns filed by a government customer or a survey of the premises, and proposes to fix the tax itself. There are no returns to compare, so the officer assesses “to the best of his judgment”. The person’s own records are usually the only material that can displace that judgment.
This guide covers the procedure: who can be assessed, the notice in FORM GST ASMT-14, the fifteen days to reply, the order in ASMT-15, the time limit, the temporary registration that often runs alongside, and what follows the order. The assessment of registered persons who fail to file returns is a different procedure, covered in Best Judgment Assessment of Non-Filers: Section 62. How the assessment provisions fit together is in Assessment under GST: the Kinds, and Who Does It.
Two kinds of person, and only two
Section 63 of the CGST Act applies to a taxable person who:
- “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 officer “may proceed to assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods”. The section opens with “Notwithstanding anything to the contrary contained in section 73 or section 74 or section 74A”. It is a separate route to a demand, with its own time limit.
Both limbs have been in the section since 2017. The words about cancellation under section 29(2) appear in the section as enacted, and the Finance Act, 2023 did not amend section 63. The only amendment to date is the insertion of “or section 74A” by section 131 of the Finance (No. 2) Act, 2024, in force from 1 November 2024 under Notification No. 17/2024-Central Tax.
Cancellation on the person’s own application is not within the second limb. That limb refers only to cancellation by the officer under section 29(2). A person who surrendered under section 29(1) and then kept trading may still fall within the first limb, as a person liable to register who has not.
A registered person is not within either limb. In M/s Arupananda Dhal v Additional Commissioner of State Tax (Appeal) (Orissa High Court, Division Bench, W.P.© No. 1416 of 2024, 29 January 2024), a works contractor had held a GSTIN since 1 July 2017 and filed returns under it. Using works payment data for 2019-20, the officer created a temporary registration in the contractor’s name with effect from 1 July 2021. He then assessed Rs 25,89,465 of tax and interest under section 63 in ASMT-15. The Court held that the “jurisdictional fact” for section 63, a failure to obtain registration despite liability, did not exist, since the department knew the person was registered. It set aside the appellate order that had dismissed the appeal for delay, and remitted the matter. In Jogesh Kumar Dehury v Additional CT & GST Officer (Orissa High Court, W.P.© No. 13455 of 2023, 10 May 2023), a section 63 order passed against a person with a valid GSTIN, without notice or reasons, was set aside after the department’s counsel accepted that no hearing had been given. For a registered person, a demand runs through section 73, section 74 or section 74A.
The temporary registration that usually comes first
Section 25(8) allows the proper officer to “proceed to register” a person who is liable but has not registered, “without prejudice to any action which may be taken under this Act”. Rule 16 sets the procedure. Where “any survey, enquiry, inspection, search or any other proceedings” show that a person liable to register has not applied, the officer “may register the said person on a temporary basis” by an order in FORM GST REG-12. The registration is effective from the date of the order.
The person must then apply for registration in the ordinary way within ninety days of the grant. If the person appeals against the temporary registration, the period is thirty days from the appellate order upholding the liability to register. The GSTIN that results is effective from the date of the REG-12 order. The procedure for applying is in Applying for GST Registration: the Steps Every Applicant Takes.
The portal’s FAQ on suo moto registration explains what the person receives. The officer generates a Temporary ID of fifteen characters ending in “TMP”. It is sent with a password by SMS, and by email if an address was recorded. No registration certificate is issued. The Temporary ID gives access to “limited functionalities like payment, notices, orders, registration etc.”, and the REG-12 order can be downloaded from Services > User Services > View Notices and Orders. The FAQ asks the person to enter the Temporary ID in the new registration application, in the section for existing registrations, so that the two are linked.
Rule 16A, inserted by Notification No. 07/2025-Central Tax, provides a separate temporary identification number for a person “not liable to registration under the Act but … required to make any payment”. It takes effect “from a date to be notified”. No date had been notified as of October 2026.
The notice: ASMT-14
Rule 100(2) prescribes the procedure. The proper officer issues a notice in FORM GST ASMT-14 “containing the grounds on which the assessment is proposed to be made on best judgment basis”. A summary is served electronically in FORM GST DRC-01. The officer then allows “a time of fifteen days to such person to furnish his reply, if any”.
The form has two alternative paragraphs, one for each limb of section 63:
- that the person, “though liable to be registered under section ------- of the Act, have/has failed to obtain registration and failed to discharge the tax and other liabilities”, with brief facts, grounds and conclusion
- that the person’s registration “has been cancelled under sub-section (2) of section 29 with effect from ------”, with the cancellation order’s reference, and that the person is liable to pay tax for the period
It then asks the person to show cause “as to why a tax liability along with interest not be created against you and why penalty should not be imposed”. It fixes a date and time for appearance. Notification No. 32/2021-Central Tax added the reference to the cancellation order. It also removed the words “for conducting business without registration despite being liable for registration” from the call to show cause.
The portal’s FAQ on assessment of unregistered persons adds four points:
- the person receives two documents: the ASMT-14 generated by the system and an annexure with the detailed reasons
- unregistered persons are also served the notice and reminders “by post/special messenger”, and the date of delivery is treated as the date of issue
- the reply, and any request for a hearing or an adjournment, is made offline to the officer
- up to three reminders, and up to three adjournments of the hearing, may be issued, after which “an ex-parte order can be issued … on the basis of available information and records”
What to have ready for the reply
| Item | Where it comes from |
|---|---|
| The ASMT-14, its annexure and the REG-12 order, with dates of delivery | Post or messenger; portal under the Temporary ID |
| The data the department relies on: e-way bills, TDS certificates, works bills, bank credits | The annexure; the person’s own copies |
| Sales and purchase records for each year in the notice, with invoices | The books |
| Workings of aggregate turnover month by month, against the threshold that applied | The books; section 22 and its notifications |
| Evidence of exempt, non-taxable or out-of-scope receipts within the turnover | Contracts, invoices, exemption notifications |
| Tax paid by customers under reverse charge on the same supplies | Customers’ records |
| For the second limb, the cancellation order and the date from which it took effect | Portal |
| Any registration held under the same PAN, in this or another State | Portal, search taxpayer |
The reply and the hearing
Section 63 has its own proviso: “no such assessment order shall be passed without giving the person an opportunity of being heard”. The fifteen days in rule 100(2) are for a written reply. The hearing date is the one fixed in the notice, or a later one if the officer grants an adjournment.
A best judgment assessment is still an assessment of tax. The person’s records, if produced, are material the officer must consider. Where they are not produced, the estimate stands on what the department has. The points that most often decide the amount are:
- whether the person was liable to register at all in each period: the threshold, any exemption, any section 24 category
- the date from which liability arose, since the tax runs only from then
- whether particular receipts were taxable supplies, and at what rate
- whether tax on any supply has already been paid by the recipient under reverse charge
There is no credit to set off. The person was not registered in the periods assessed. Section 16 allows credit only to a registered person, and the ASMT-15 table has no column for it.
The order: ASMT-15
After the reply and the hearing, the officer passes an order in FORM GST ASMT-15 and uploads a summary in DRC-07. The portal’s FAQ describes two outcomes: an assessment order creating a demand, or an order dropping the proceedings.
ASMT-15 records the notice, the reply and the hearing dates. It sets out the amount assessed in a table with columns for tax, interest, penalty and others, period by period. The form states that “interest has been calculated upto the date of passing the order”. Interest for the period after the order is to be “worked out and paid along with the dues”. It directs payment by a date “failing which proceedings shall be initiated against you to recover the outstanding dues”.
When the order issues, the portal’s FAQ says the case status changes to “Order for creation of demand issued”. It also says the electronic liability register is updated with the demand, under the Temporary ID or the GSTIN.
Interest and penalty. Interest follows from section 50 on tax not paid when due. The penalty that the form contemplates is not in section 63 itself. For failure to register, section 122(1)(xi) provides for ten thousand rupees or an amount equal to the tax evaded, whichever is higher. The general penalty under section 125 is up to twenty-five thousand rupees.
The time limit
The order must issue “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”. Under section 44, that date is 31 December following the end of the financial year, unless extended. For 2023-24, the annual return was due on 31 December 2024, so a section 63 order for that year must issue by 31 December 2029.
This limit is section 63’s own. It does not borrow the time limits in sections 73, 74 or 74A, which the section displaces by its opening words. It differs from them in three ways:
- it limits the order, not the notice
- it does not depend on whether fraud is alleged
- it is not split by financial year as sections 73, 74 and 74A now are
Rights and duties at each step
| Stage | The officer | The person |
|---|---|---|
| Temporary registration | May register under section 25(8) and rule 16, by REG-12 | Must apply for regular registration within ninety days, or thirty days after an appeal fails |
| ASMT-14 | Must state the grounds; serve DRC-01 summary; allow fifteen days | May reply in fifteen days and attend the hearing |
| Hearing | Must give an opportunity of being heard before any order | May seek adjournment; the portal FAQ records a limit of three |
| ASMT-15 | Must pass the order within five years of the annual return due date; upload DRC-07 | Must pay by the date stated, or appeal |
After the order: payment, appeal, recovery
Payment. The amount can be paid against the demand through the portal using the Temporary ID or, once registered, the GSTIN. The portal’s FAQ explains that payments are reflected in the electronic cash ledger and can be adjusted against the liability.
Appeal. An ASMT-15 order is a decision under the Act, appealable under section 107 within three months of communication. The admitted amount and ten per cent of the disputed tax must be paid as pre-deposit. Appeals and Pre-Deposit explains the procedure. In the Arupananda Dhal case the appeal had been rejected as filed 380 days late. The High Court sent it back to the Appellate Authority, finding that the explanation for the delay had not been properly considered and that the assessment had been made without jurisdiction.
Recovery. Under section 78, an amount payable under an order “shall be paid … within a period of three months from the date of service of such order, failing which recovery proceedings shall be initiated”. The officer may require earlier payment for recorded reasons. Recovery is covered in Recovery, and Paying in Instalments. Section 83 allows provisional attachment once a proceeding under Chapter XII, which includes section 63, has been initiated.
What can still be put right
- Registration. The regular registration application under rule 16(3) brings the person into the system for the future. It does not cancel the assessment for the past.
- Facts the officer did not have. Records, contracts and evidence of exemption are most useful at the ASMT-14 stage. After the order, they go to the Appellate Authority under section 107.
- A registered person assessed as unregistered. Where the person held a GSTIN for the period, the objection is to jurisdiction. The Orissa cases show that it can be raised before the officer, in appeal and in a writ petition.
- A person whose registration was cancelled by the officer. Revocation and its time limits are in Getting a Cancelled Registration Back: Revocation. Restoration by the department or on appeal is in When a Cancelled Registration Is Restored by the Department or on Appeal.
The procedure in order
- Log in with the Temporary ID, download any REG-12 order and ASMT-14, and note the date of delivery of the notice by post or messenger.
- Apply for regular registration within ninety days of the REG-12 order, entering the Temporary ID in the application.
- Establish whether section 63 applies at all: whether a GSTIN was held for the period, and whether any cancellation was under section 29(2) or on the person’s own application.
- Rebuild turnover for each period in the notice from the books, and identify exempt receipts, reverse charge supplies and the date liability arose.
- File the reply with the officer within fifteen days and attend the hearing on the date fixed, seeking an adjournment in writing if needed.
- On an ASMT-15 order, check that it is within five years of the annual return due date. Then pay the tax and interest, or appeal under section 107 within three months with the pre-deposit.
The next guide covers the summary assessment under section 64, made at once with senior approval where delay would harm the revenue, and the thirty days allowed to apply for its withdrawal.