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CA Final · Indirect Tax Laws · Assessment and Audit

Kaveri Exports Ltd applied for payment of tax on a provisional basis. The proper officer's order in FORM GST ASMT-04 fixes the amount covered under the bond at ₹80,00,000 (including central tax, State tax and cess). Under Rule 98, what is the maximum security in the form of a bank guarantee that can be required, and which form is used for executing the bond?

The security can be at most 25 per cent of the bond amount, which is ₹20,00,000 on an ₹80,00,000 bond. The bond is executed in FORM GST ASMT-05 along with a bank guarantee. FORM GST ASMT-07 is the final assessment order, not the bond form.

  1. A₹80,00,000; FORM GST ASMT-05
  2. B₹20,00,000; FORM GST ASMT-05Correct
  3. C₹20,00,000; FORM GST ASMT-07
  4. D₹8,00,000; FORM GST ASMT-05

Explanation

Rule 98(3) limits the security to not exceeding 25% of the bond amount: 25% of ₹80,00,000 = ₹20,00,000. The bond is executed in FORM GST ASMT-05 under Rule 98(4). ₹8,00,000 wrongly uses 10%, and ASMT-07 is the final assessment order.

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