Assessment, Audit, Inspection, Offences, Penalties and Appeals under GST (Overview)

Overview

GST is a self-assessment system, but the law provides mechanisms to check correctness and ensure compliance:

• assessment and audit to verify tax/ITC,
• inspection/search/seizure to deal with serious violations (overview),
• offences and penalties to deter non-compliance,
• appeals to provide a remedy when a taxpayer disputes an order (concept/overview).

In exams, questions are typically conceptual:

• define assessment/audit,
• list types of assessment,
• give examples of offences and penalties,
• write the basic appeal flow.

Learning objectives

You should be able to:

• Explain assessment, audit, inspection and penalties in simple terms.
• List key types of assessment (overview).
• Mention common offences and the idea of penalties (concept).
• Explain why appeals exist and write the basic process flow.

Assessment under GST (meaning)

Assessment means determining the tax liability (or refund) and verifying correctness of returns and payments (concept/overview). In GST, the taxpayer generally self-assesses, but assessment provisions address mistakes, non-filing, or special situations.

Types of assessment (overview table)

Exams often ask “list types” + one line each.

Audit under GST: purpose and types (overview)

Audit means examination of records/returns to check:

• correctness of turnover, tax paid, refund claimed,
• correctness of ITC claimed (concept),
• compliance with procedures.

Types (overview):

• departmental/authority audit (as per law),
• audit by Chartered Accountant/Cost Accountant in specified situations (overview).

Inspection, search and seizure (basic idea)

These are enforcement actions used when authorities have reasons to believe there is serious non-compliance (overview), such as:

• suppression of turnover,
• bogus invoicing,
• goods liable to confiscation.

At basics level, remember: inspection = checking premises/records;
search = looking for concealed evidence;
seizure = taking possession of goods/documents (overview).

Offences under GST (examples)

Common offences (exam-friendly examples) (concept/overview):

• tax evasion by suppressing sales/turnover,
• issuing fake invoices without supply,
• wrongful ITC claim,
• collecting GST but not paying to government,
• obstructing officers or failure to maintain records (overview).

Write: “any three examples” in exam answers.

Penalties (basic principles)

Penalties are monetary consequences for non-compliance. Basic principles (concept/overview):

• higher penalty for fraud/wilful misstatement vs genuine error,
• interest may apply for delayed payment,
• penalties can be reduced if tax and dues are paid promptly (overview).

Exam tip: Avoid quoting exact amounts (often changes); write principles and examples.

Appeals (overview): why and basic flow

Appeal is a legal remedy to challenge an order passed by a GST authority (concept/overview). Appeals help ensure fairness and correct application of law.

Typical flow (overview):

1. order/decision passed (assessment/audit demand),
2. taxpayer files appeal within time with prescribed form/fee,
3. appellate authority hears and passes decision,
4. further appeal to higher forum/tribunal/court as applicable (overview).

A compliance-first approach (table)

Flowchart: from notice to appeal

Notice / discrepancy
      |
      v
Reply with documents + pay/rectify if required
      |
      v
Order passed (if any)
      |
      v
Disagree? -> File appeal within time (overview)
      |
      v
Hearing -> Appellate order

Quick recap (1-minute revision)

• Assessment determines/verifies tax liability; key types include self, provisional and best judgment (overview).
• Audit checks correctness of turnover, tax and ITC (concept).
• Inspection/search/seizure are enforcement tools (overview).
• Offences include evasion, fake invoices, wrongful ITC.
• Penalties depend on nature (fraud vs error); appeals provide remedy.