Assessment of Non-Filers of GST Returns – Section 62 of GST

The GST regime in India emphasizes compliance and timely filing of returns by registered taxpayers. However, there may be instances where a registered person fails to furnish returns, despite being issued a notice. To address such non-compliance, Section 62 of the CGST Act, 2017 empowers the tax authorities to conduct best judgment assessments for non-filers. This article provides an in-depth explanation of Section 62 – Assessment of Non-Filers of Returns, its legal implications, procedural aspects, and recent amendments.

What is Section 62 of the CGST Act?

Section 62 pertains to the assessment of registered taxpayers who fail to file GST returns, even after receiving a notice under Section 46 of the CGST Act. This section grants the proper officer the authority to assess the tax liability of the defaulting person based on available records and best judgment.

Legal Text of Section 62 – Key Provisions Explained

Sub-section (1):

If a registered person fails to furnish returns under:

• Section 39 of the CGST Act (Monthly or Quarterly GSTR-3B), or

• Section 45 of the CGST Act (Final return),

even after receiving a notice under Section 46, the proper officer may assess their tax liability to the best of his judgment using:

• Any relevant material available,

• Any information gathered during investigations.

Time Limit:
The assessment order must be issued within five years from the due date of the annual return under Section 44 for the relevant financial year.

Sub-section (2):

If the taxpayer furnishes a valid return within 60 days from the service of the assessment order, the order is deemed to be withdrawn.

However, the taxpayer remains liable for:

• Interest under Section 50 of the CGST Act, and

• Late fee under Section 47 of the CGST Act.

Proviso Inserted (w.e.f. 1st October 2023):

If the taxpayer fails to furnish the return within 60 days, an additional window of 60 days is granted on payment of additional late fee of ₹100 per day (from the 61st day onwards).

• If the return is furnished within this extended period, the assessment order will still be deemed withdrawn, but the taxpayer continues to be liable for interest and late fee as applicable.

Summary of Timelines and Penalties Under Section 62

Key Amendments and Notifications

• Finance Act, 2023 (Notification No. 28/2023 – CT dated 31st July 2023):

  • Extended the return filing timeline from 30 days to 60 days.

  • Inserted the additional 60-day window with late fee.

• Finance Act (No. 2), 2024 (Notification dated 16th August 2024):

  • Included reference to Section 74A in addition to Sections 73 and 74 of the CGST Act.

Practical Implications for Taxpayers

1. Proactive Filing Avoids Harsh Outcomes

Non-filing after receiving a notice can result in an estimated tax demand that may be significantly higher than actual liability. Timely filing helps avoid such burdens.

2. Interest and Late Fee are Inevitable

Even if the assessment order is withdrawn after filing, the taxpayer must still pay interest and late fees, adding to compliance costs.

3. Additional Late Fee Burden After 60 Days

Missing the initial 60-day deadline now attracts ₹100 per day late fee, which can quickly accumulate if returns are not filed promptly.

Compliance Tips to Avoid Best Judgment Assessment

• Set reminders for all due dates under GST, especially GSTR-3B and final return.

• Respond to Section 46 notices without delay.

• Seek professional advice in case of confusion or disputes regarding return filing.

• Regularly reconcile your books and file returns even if there is no turnover (NIL returns are mandatory for active registrations).

• Use the extended 60-day window wisely but avoid dependence on it.

Conclusion

Section 62 of the CGST Act serves as a powerful tool for the authorities to ensure compliance from non-filers. With recent amendments making the process more structured and strict, registered taxpayers must ensure timely filing of returns. While the law provides opportunities to correct the default, it comes with financial penalties and interest obligations. The best strategy is to avoid falling into non-filing situations by maintaining disciplined and timely GST compliance.

Stay compliant, stay audit-ready. For any professional assistance with GST return filing or representation before tax authorities, consult with a qualified Chartered Accountant like us at +91 9769647582.