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CA Final · Indirect Tax Laws · Assessment and Audit

Zenith Polymers Ltd. applied for provisional assessment under section 60 in FORM GST ASMT-01. The proper officer, after considering the application, issued an order in FORM GST ASMT-04 specifying that the amount covered under the bond is Rs 40,00,000. The final assessment order in ASMT-07 later showed tax payable fully discharged. Based on Rule 98 of the CGST Rules, 2017, what is the maximum security by way of bank guarantee that the officer could have required, and which form is used by the applicant to seek its release?

Security cannot exceed twenty-five per cent of the bond amount, so on a bond of Rs 40,00,000 the maximum bank guarantee is Rs 10,00,000. After the final assessment order, the applicant requests release of security by filing FORM GST ASMT-08; the officer then issues the release order in ASMT-09.

  1. ARs 10,00,000; FORM GST ASMT-08Correct
  2. BRs 10,00,000; FORM GST ASMT-09
  3. CRs 40,00,000; FORM GST ASMT-08
  4. DRs 16,00,000; FORM GST ASMT-05

Explanation

Rule 98(3) caps security at 25% of the amount covered under the bond: 25% x Rs 40,00,000 = Rs 10,00,000. Under Rule 98(6), after the final order the applicant applies in FORM GST ASMT-08 for release of security; ASMT-09 is the officer's release order. ASMT-05 is the bond itself.

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