June 2019

AN ASSESSMENT OF ASSESSMENT PROVISIONS

SUNIL GABHAWALLA | RISHABH SINGHVI | PARTH SHAH
Chartered Accountants


Tax laws are structured on three key pillars – levy, assessment and collection. Assessment is the link between levy and collection of taxes. Assessment provisions under indirect tax laws, especially excise law, have evolved from the era of officer control and assessment to self-assessment.

 

With its introduction in 2017, GST law is now about to change gears and enter the phase of ‘Assessments’. This phase operates as a litmus test over the extent of percolation of the law into the system both at the Government’s and the tax payer’s end. Tax payers are about to experience challenges on the front of assessments, audits and adjudications and this article examines some of the issues involved.

 

ASSESSMENT – AUDIT – ADJUDICATION

Though the above terms are used inter-changeably, they represent distinct activities in any legal enforcement. The GST law has made specific provisions towards each of these aspects under its machinery provisions, i.e., Chapter XII – Assessment; Chapter XIII – Audit; and Chapter XV – Demands & Recovery.

 

Assessment has been defined u/s. 2(11) as any ‘determination of tax liability’. Advanced Law lexicon explains assessment as ‘determination of rate or amount of something such as tax, damages, imposition of something such as tax or fine according to an established rate’.

 

Audit u/s. 2(13) involves an elaborate exercise of examination of records, returns and other documents maintained to verify correctness of taxes paid / refunded and assess compliance under the Act.

 

Adjudication has not been defined but the term ‘Adjudication authority’ has been defined as an authority that ‘passes any order or decision under the Act’.

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