Section 63 of the CGST Act empowers the proper officer to assess the tax liability of persons who were liable to register under GST but failed to do so, or whose registration was cancelled. The assessment is made on a best judgment basis.
This article explains the Section 63 assessment process and the safeguards available.
When Section 63 Applies
Section 63 applies to:
- Persons who were liable to obtain GST registration but failed to do so.
- Persons whose GST registration was cancelled but who were liable to pay tax for the period before cancellation.
The Assessment Process
- The officer assesses tax liability to the best of his judgment.
- The assessment order must be passed within five years from the due date for filing the annual return for the tax period.
- The officer must give an opportunity of personal hearing before passing the order.
Safeguards for the Taxpayer
- Right to personal hearing: The officer cannot pass an order without giving an opportunity to be heard.
- Right to representation: The taxpayer can be represented by a professional.
- Right to challenge: The assessment order can be challenged before the Appellate Authority.
Practical Steps
- If you receive a Section 63 notice, respond immediately.
- Provide evidence of non-liability or correct liability.
- If you were liable, consider voluntary registration and payment.
- Challenge the assessment if the demand is excessive or without basis.
Conclusion
Section 63 assessment targets unregistered persons who should have been registered. The best defence is to demonstrate that the person was not liable to register or that the liability assessed is excessive.
At Anuj Desai & Associates, we provide expert representation services for Section 63 assessments. Our team can help you respond effectively and protect your interests.
For a confidential consultation, contact us at office@anujdesaiassociates.com or call 9619456656. Visit our website at https://anujdesaiassociates.com or connect with our founder on LinkedIn at linkedin.com/in/ca-anuj-desai-122547230.