Assessment, Audit, Scrutiny, Demand and Recovery, Advance Ruling, Appeals and Revision: formula sheet

Key formulas

Self-assessment (Section 59)

Every registered person self-assesses tax and files a return for each tax period under Section 39

No officer order is needed. This is the default mode.

Provisional assessment: request and order (Section 60(1))

Written request with reasons → proper officer order within 90 days of receipt

Available when you cannot determine the value or the rate of tax. The officer allows payment at the rate or value he specifies.

Provisional assessment: bond (Section 60(2))

Bond in the prescribed form with surety or security as the officer deems fit

The bond binds you to pay the difference between tax finally assessed and tax provisionally assessed.

Final order timeline (Section 60(3))

Final order within 6 months of the communication of the provisional order

Extension for sufficient cause with reasons recorded: Joint or Additional Commissioner up to 6 more months; Commissioner up to 4 years more.

Interest and refund (Section 60(4) and (5))

Interest at the Section 50(1) rate from the first day after the due date until actual payment

Applies whether payment is made before or after the final order. Refund after final assessment carries interest as per Section 56, subject to Section 54(8).

Scrutiny of returns (Section 61)

Notice of discrepancies → explanation → 30 days (or further period allowed)

If the explanation is acceptable, no further action. If not, or the discrepancy is accepted but not corrected in the return for the month of acceptance, the officer may act under Section 65, 66 or 67, or determine tax under Section 73, 74 or 74A.

Non-filers (Section 62)

Best-judgment order within 5 years from the due date of the annual return for the relevant financial year

Only after a Section 46 notice is ignored. A valid return within 60 days of service of the order deems the order withdrawn; interest and late fee continue. A further 60 days is allowed on an additional late fee of ₹100 per day beyond the first 60 days.

Unregistered persons (Section 63)

Best-judgment order within 5 years from the due date of the annual return for the relevant financial year

Opportunity of being heard is mandatory before the order.

Summary assessment (Section 64)

Previous permission of Additional or Joint Commissioner + sufficient grounds to believe delay may harm revenue

The person may apply within 30 days of receipt of the order, or the Additional or Joint Commissioner may act on his own motion, if the order is considered erroneous. The order is withdrawn and the procedure under Section 73, 74 or 74A follows.

Scrutiny response period (s.61)

30 days from being informed, or further period permitted by the officer

Failing this, or failing to correct an accepted discrepancy, the officer may act under section 65, 66, 67 or determine tax under section 73, 74 or 74A.

Audit notice (s.65(3))

Notice not less than 15 working days before audit

Notice is given in the prescribed manner.

Audit completion (s.65(4))

3 months from commencement; extension up to a further 6 months

Extension is by the Commissioner, with reasons recorded in writing.

Audit findings (s.65(6))

Inform findings, rights, obligations and reasons within 30 days of conclusion

The proper officer does this.

Special audit report (s.66(2))

90 days; extendable by a further 90 days

Extension by the Assistant Commissioner on application by the registered person or the CA/cost accountant, or for material and sufficient reason.

Special audit authority (s.66(1))

Officer not below Assistant Commissioner + prior approval of Commissioner

Auditor is a CA or cost accountant nominated by the Commissioner. Expenses are determined and paid by the Commissioner.

Inspection and search authority (s.67)

Proper officer not below Joint Commissioner, with reasons to believe

He authorises other central tax officers in writing, or may search and seize himself.

Return of documents (s.67(3))

Within 30 days of notice, for documents not relied upon

Applies to documents, books or things not relied upon for the notice.

Seized goods without notice (s.67(7))

Return if no notice within 6 months; extendable by up to 6 months

Extension is by the proper officer on sufficient cause.

Section 73 notice: time limit

Notice ≥ 3 months before the order deadline; order within 3 years from the due date of the annual return for the relevant financial year (or from the date of erroneous refund)

Applies to non-fraud cases for periods up to FY 2023-24. Count the 3 years from the annual return due date, not from the end of the year.

Section 73 penalty on order

Penalty = 10% of tax or ₹10,000, whichever is higher

Charged in the order under Section 73(9), along with tax and interest under Section 50.

Section 73 no-penalty route

Pay tax + interest within 30 days of the show cause notice → no penalty; proceedings deemed concluded

Penalty still applies if self-assessed tax or tax collected was not paid within 30 days from its due date of payment (Section 73(11)), even if you pay within 30 days of the notice.

Section 73 voluntary payment

Pay tax + interest before notice, on own or officer's ascertainment, and inform the officer in writing

The officer shall not serve notice for the tax so paid or any penalty on it, subject to Section 73(11). If the payment falls short, notice can be issued for the shortfall.

Section 74 notice: time limit

Notice ≥ 6 months before the order deadline; order within 5 years from the due date of the annual return (or from the date of erroneous refund)

Applies to fraud, wilful misstatement or suppression cases for periods up to FY 2023-24.

Section 74 penalty ladder

Before notice: 15% of tax | Within 30 days of notice: 25% of tax | Within 30 days of order: 50% of tax | Order after contest: penalty = 100% of tax

In each case, tax and interest under Section 50 are also paid. The 100% penalty is the penalty equivalent to the tax specified in the notice.

Statement for other periods

Section 73(3) and (4): a statement for other periods is deemed to be a notice under Section 73(1) if the grounds are the same as in the earlier notice | Section 74(3) and (4): a statement for other periods is deemed to be a notice under Section 73(1) of the Act if the grounds, except the ground of fraud, wilful misstatement or suppression of facts to evade tax, are the same as in the earlier notice

Under Section 73, the grounds must be the same as in the earlier notice. Under Section 74, the fraud, wilful misstatement or suppression ground need not be the same, but the other grounds must be.

Section 79 modes of recovery

Deduction from money owed to defaulter | Detention and sale of goods | Recovery from third person | Recovery through court or Collector as arrears of land revenue | Magistrate proceedings

Plain-words list. The officer uses these once the amount is due under an order. Section 79 is outside the official text supplied for this page (only Sections 73 and 74), so check the list against the full Act before you quote it.

Questions allowed (section 97(2))

(a) classification of goods/services; (b) applicability of a notification; (c) time and value of supply; (d) admissibility of ITC of tax paid or deemed paid; (e) liability to pay tax; (f) whether registration is required; (g) whether a thing done amounts to or results in a supply

Seven heads. The question must fall in one of them. Learn them as a list.

Who can apply (section 95(c))

Applicant = person registered or desirous of obtaining registration

Unregistered persons planning to start business are included.

Binding effect (section 103(1))

Ruling binds (a) the applicant, and (b) the concerned officer or jurisdictional officer in respect of the applicant

Binding only for the matter in the application.

Duration of binding effect (section 103(2))

Binding unless law, facts or circumstances supporting the ruling have changed

Applies to rulings of the Authority, Appellate Authority and National Appellate Authority.

National Appellate Authority appeal (section 101B)

Appeal within 30 days of communication; authorised officer within 90 days; condonation up to a further 30 days

Only for conflicting rulings of Appellate Authorities of two or more States or UTs. Time runs from communication of the last conflicting ruling.

Order of Appellate Authority (section 101)

Order within 90 days of filing of appeal; if members differ, deemed that no ruling can be issued

Section 101C for the National Appellate Authority: majority opinion prevails, order as far as possible within 90 days.

Void ruling (section 104)

Ruling obtained by fraud, suppression of material facts or misrepresentation may be declared void ab initio after a hearing

Provisions of the Act then apply as if the ruling was never made.

Time limit for taxpayer's appeal

3 months from the date the order is communicated

Section 107(1). The Appellate Authority may allow a further 1 month if sufficient cause is shown (section 107(4)).

Time limit for department's application

6 months from communication of the order

Section 107(2), on the Commissioner's direction. Condonation of up to 1 month applies here too under section 107(4).

Pre-deposit under section 107(6)

Admitted amount in full + 10% of remaining disputed tax, subject to a maximum of ₹20 crore

Admitted tax, interest, fine, fee and penalty must be paid in full. The 10% is on the remaining tax in dispute only. The ₹20 crore cap (earlier ₹25 crore) applies from 1-11-2024.

Pre-deposit for order under section 129(3)

25% of the penalty

Proviso to section 107(6): detention and seizure penalty orders.

Stay of recovery

Pre-deposit paid ⇒ recovery of balance deemed stayed

Section 107(7).

Adjournments

Not more than 3 times to a party

Section 107(9), with reasons recorded in writing.

Disposal period

1 year from filing, where possible

Section 107(13). Court or Tribunal stay period is excluded.

Revision bar under section 108(2)

No revision if: appealed; section 107(2) period not expired; more than 3 years since the order; already revised; or order itself passed under section 108(1)

The proviso allows revision on a point not raised and decided in the appeal, before one year from the appeal order or three years from the original order, whichever is later.

Quick revision

• IGST section 20 applies the CGST provisions on assessment, audit, demand, advance ruling and appeals to integrated tax, mutatis mutandis.
• Under section 71 CGST, an officer authorised by a proper officer not below Joint Commissioner can access a registered person's place of business for audit, scrutiny, verification and checks.
• Under section 71(2), the person in charge must make records available on demand, within a period not exceeding fifteen working days, or any further time allowed.
• Section 71 records include the trial balance, audited annual accounts where required, cost audit report and income-tax audit report, if any.
• Section 84 CGST: if a demand is enhanced in appeal, a further demand notice is served for the increase; recovery already begun continues without a fresh notice.
• Section 84: if the demand is reduced, no fresh notice is needed, intimation is given, and recovery continues for the reduced amount.
• Advance ruling can be sought on seven matters listed in section 97(2), including classification, time and value of supply, input tax credit and registration.
• The state or UT advance ruling authority is deemed to be the authority for that state or UT under sections 96 and 99.
• A ruling binds only the applicant and the officers concerned with the applicant, unless it is a National Appellate Authority ruling under section 103(1A).
• A ruling binds unless the law, facts or circumstances supporting it have changed (section 103(2)).
• A ruling obtained by fraud, suppression or misrepresentation can be declared void ab initio after a hearing (section 104).
• Under IGST section 20, the pre-deposit for an appeal is subject to a maximum of forty crore rupees for each appeal to the Appellate Authority or Tribunal.

Common mistakes

• Treating scrutiny under Section 61 as a formal assessment that ends in an order. Fix: Section 61 is a verification step. It leads to no further action if you explain, or to action under Section 65, 66, 67, or determination under Section 73, 74 or 74A if you do not.
• Saying the officer can pass a provisional order without the taxpayer asking. Fix: Provisional assessment starts with your written request giving reasons. The officer then orders within 90 days of receipt.
• Treating audit under section 65 and special audit under section 66 as the same. Fix: Section 65 is by tax officers. Section 66 is by a CA or cost accountant nominated by the Commissioner, in complex cases.
• Saying audit must be done within three months of the notice date. Fix: The three months run from commencement of audit, which is the later of records being made available or actual institution of audit at the premises.
• Applying Section 73 or 74 to every period without checking the year. Fix: Write the financial year first in every answer. For later periods, mention that a separate provision (Section 74A) applies.
• Counting the 3-year or 5-year limit from the end of the financial year. Fix: Count from the due date of furnishing the annual return for that financial year, or from the date of erroneous refund.
• Saying only registered persons can apply. Fix: Remember the definition includes a person desirous of obtaining registration.
• Treating a ruling as binding on all taxpayers in the same business. Fix: Under section 103(1) it binds only the applicant and the concerned or jurisdictional officer. The only extension is for National Appellate Authority rulings, which also bind registered persons with the same PAN.
• Calculating the 10% on the whole demand including admitted tax. Fix: Subtract the admitted amount first. Pay it in full. Then take 10% of the remaining disputed tax only.
• Counting the three months from the date of the order instead of the date of communication. Fix: Section 107(1) runs from the date the order is communicated to the person. Always look for the communication date in the facts.

Exam tips

• Write the section number with the type of assessment in the first line. Case-based answers earn marks for correct provision, analysis and conclusion.
• Learn the time limits as a small list: 90 days, 6 months, 30 days, 60 days, 5 years. Examiners build questions around them.
• For Section 64, always mention previous permission and the 30-day application, and that the order is withdrawn and Section 73, 74 or 74A applies.
• Use the dates in the facts. Show your counting so partial marks are safe.
• Add one practical line, such as filing the pending return or keeping the bond documents ready.
• Write the section number first, then the conditions. Case answers score on provision, analysis and conclusion.
• Learn the time limits as pairs: audit 3 plus 6 months, special audit 90 plus 90 days.
• In scrutiny answers, show the escalation to sections 65, 66, 67 and 73, 74 or 74A.