Complete Guide to GST Procedure in India

Introduction

Goods and Services Tax (GST) is designed to streamline the taxation system in India by enabling efficient tax collection, reducing corruption, and simplifying the movement of goods across state borders. It aims to create a unified tax structure that improves transparency and ease of doing business.

The GST law is based on the principle of self-assessment, allowing taxpayers to calculate and pay their own taxes with simplified compliance procedures. It also outlines clear provisions for notices, demands, and recovery actions in cases where taxes are not paid, underpaid, or GST returns are not filed on time.

GST Audit by Registered Dealer Explained

Up to FY 2019–20, every registered dealer whose annual turnover exceeded ₹2 crore was required to get their accounts audited by a Chartered Accountant (CA) or Cost Accountant (CMA). The ICAI also clarified through an announcement dated 28th September 2018 that an internal auditor cannot simultaneously conduct a GST audit.

However, from FY 2020–21 onwards, the mandatory GST audit requirement along with CA/CMA certification in Form GSTR-9C was removed. It has now been replaced with self-certification of Form GSTR-9C, which serves as a reconciliation statement submitted by the taxpayer.

GST Audit by Tax Authorities Explained

General Audit:
The Commissioner of GST, or an officer authorised by him, may conduct a general audit of any registered taxpayer. This audit is carried out to verify compliance with GST laws and ensure proper maintenance of records and accurate tax reporting.

Special Audit:
In complex cases or where there is a concern for revenue protection, the GST department may order a special audit. In such cases, a Chartered Accountant (CA) or Cost Accountant (CMA) is appointed by the tax authorities to conduct a detailed examination of the accounts and records of the taxpayer.

Complete Guide to GST Assessment Process

Assessment under GST refers to the determination of a taxpayer’s tax liability under the GST law. It ensures that the correct amount of tax is calculated and paid by the registered person. GST assessments are broadly classified into different types, as explained below:

Self Assessment

Under GST, every registered taxpayer is required to assess their own tax liability and file returns accordingly for each tax period. This process is known as self-assessment and forms the basis of GST compliance.

Provisional Assessment

When a taxpayer is unable to determine the correct value of goods or the applicable tax rate, they may request the GST officer for provisional assessment. In such cases, the proper officer allows the taxpayer to pay tax on a provisional basis at a specified rate or value, which is later finalized.

Scrutiny Assessment

In scrutiny assessment, the GST officer examines the filed returns to verify their accuracy and correctness. If any discrepancies are found, the taxpayer is asked to provide explanations. From FY 2019–20 onwards, automated return scrutiny has been introduced to improve transparency and efficiency in the process.

Summary Assessment

Summary assessment is conducted when the GST officer has sufficient reason to believe that any delay in determining tax liability may adversely affect government revenue. In such cases, the officer can pass a summary assessment order with prior approval from the Additional or Joint Commissioner to safeguard revenue interests.

What Is Best Judgment Assessment in GST?

1. Assessment of Non-Filers of Returns
If a registered taxpayer fails to file GST returns even after receiving a notice, the proper officer will determine the tax liability based on the best available information and records. This is known as best judgment assessment, where the officer estimates the tax due using relevant material and evidence.

2. Assessment of Unregistered Persons
This assessment applies when a taxable person is liable to register under GST but fails to do so. In such cases, the GST officer assesses the tax liability based on best judgment using available data. The person is also issued a show cause notice and given an opportunity to be heard before the final assessment is made.

Demand and Recovery Under GST Explained

Demand and recovery provisions under GST apply when a registered taxpayer has either not paid tax, underpaid tax, or incorrectly claimed a refund or Input Tax Credit (ITC). These provisions ensure that any tax shortfall is recovered along with applicable interest and penalties.

The proper officer issues a show cause notice demanding payment of tax and penalty, especially in cases involving fraud or deliberate non-compliance. Tax demands may arise in the following situations:

Unpaid or short-paid tax or incorrect refund claims
Tax collected from customers but not deposited with the Central or State Government
Payment of CGST/SGST instead of IGST, or vice versa

If the taxpayer fails to pay the demanded amount within the prescribed time, the GST authorities initiate recovery proceedings as per the provisions of the GST law.

What Is Advance Ruling in GST? Complete Guide

Advance Ruling under GST refers to a mechanism where a taxpayer can seek clarification from the GST authorities on specific tax matters before undertaking a proposed business activity. This helps businesses ensure compliance in advance and reduces the risk of future disputes and costly litigation.

An advance ruling is a written decision issued by the tax authority in response to an applicant’s query regarding the applicability of GST provisions on the supply of goods or services.

About the Author

Dakesh

Dakesh simplifies complex legal regulations into clear, practical guidance, enabling entrepreneurs to stay compliant while building sustainable and scalable businesses.

May 4, 2026