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CA Final · Indirect Tax Laws · Assessment and Audit

Rohini Pharma Ltd. obtained an order under rule 98 allowing provisional payment of tax. The bond amount fixed in FORM GST ASMT-04 is ₹80,00,000. The final assessment order in ASMT-07 was issued, and the company paid the amount specified. Which statement is correct?

Security cannot exceed twenty-five per cent of the bond amount, so on ₹80,00,000 it is at most ₹20,00,000. After the final order, the person applies in ASMT-08, and the officer issues the release order in ASMT-09 within seven working days of receiving it.

  1. ASecurity in the form of bank guarantee can be at most ₹20,00,000; the company applies in ASMT-08 for release and the officer must issue ASMT-09 within seven working days of receipt of the applicationCorrect
  2. BSecurity in the form of bank guarantee can be at most ₹40,00,000; ASMT-09 is to be issued within fifteen days of the application
  3. CSecurity can be at most ₹20,00,000; the company applies in ASMT-05 and release order is issued in ASMT-07
  4. DSecurity must be the full ₹80,00,000; release order ASMT-09 is issued within seven working days of ASMT-07

Explanation

Rule 98(3) caps security at 25% of the bond amount: 25% × 80,00,000 = ₹20,00,000. After the final order in ASMT-07, the applicant files ASMT-08 under rule 98(6), and under rule 98(7) the officer issues ASMT-09 within seven working days of receipt, after ensuring payment. The 50% and full-amount options are incorrect.

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