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CA Final · Indirect Tax Laws · Assessment and Audit

Rohini Traders applied for provisional assessment under section 60. The proper officer's order in FORM GST ASMT-04 requires a bond covering Rs 40,00,000 of tax (including IGST, CGST, SGST and cess). Under Rule 98, what is the maximum security by bank guarantee that can be demanded, and when may the applicant seek its release?

Security cannot exceed 25% of the bond amount, so Rs 10,00,000. After the final order in ASMT-07, the applicant files FORM GST ASMT-08, and the officer releases the security, once the specified amount is paid, within seven working days of receiving the application.

  1. ARs 10,00,000; the applicant may apply in FORM GST ASMT-08 after the final assessment order in FORM GST ASMT-07 is issued, and the officer must release it within seven working days of receiving the application after the amount is paidCorrect
  2. BRs 10,00,000; the security is released automatically on issue of FORM GST ASMT-07 without any application
  3. CRs 20,00,000; the applicant may apply in FORM GST ASMT-08 and release must be made within fifteen days
  4. DRs 4,00,000; the applicant may apply in FORM GST ASMT-06 after the final order

Explanation

Rule 98(3) caps security at 25% of the bond amount: 25% of Rs 40,00,000 is Rs 10,00,000. Under Rule 98(6) the applicant applies in ASMT-08 after the order under 98(5). Under Rule 98(7) the officer releases it after ensuring payment, within seven working days of receipt of the application. Release is not automatic.

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