Summary Assessment in Certain Special Cases – Section 64 of GST

The GST law aims to streamline tax administration, improve compliance, and safeguard government revenue. One of the key provisions designed to protect revenue interests is Section 64 of the CGST Act, 2017, which deals with “Summary Assessment in Certain Special Cases.” This section grants powers to tax authorities to swiftly assess and recover tax dues in exceptional situations.

In this blog post, we’ll explore the purpose, applicability, procedural requirements, and legal safeguards provided under Section 64, including recent amendments introduced by the Finance Act, 2024.

What is Section 64 of the CGST Act?

Section 64 empowers the proper officer to conduct a summary assessment of tax liability when there is a perceived risk to government revenue due to potential delay. This is an emergency measure invoked only under special circumstances.

Key Features of Section 64

• It is used when immediate assessment is necessary to protect revenue.

• It requires prior approval from a Joint Commissioner or Additional Commissioner.

• It can be initiated based on any available evidence indicating tax liability.

Section 64(1): Powers to Initiate Summary Assessment

The proper officer, upon discovering any evidence that suggests a taxpayer owes GST, can proceed to assess the tax immediately, with prior permission from the Additional Commissioner or Joint Commissioner.

Conditions for Summary Assessment under Sub-Section (1)

• There must be evidence showing a tax liability.

• The officer must have sufficient grounds to believe that delayed action could negatively affect revenue.

• The objective is to prevent tax evasion or loss to the exchequer.

Deemed Taxable Person in Case of Unascertainable Identity

If the identity of the person liable to tax is not known and the liability arises from the supply of goods, the person in charge of the goods (e.g., transporter, warehouse keeper, etc.) shall be deemed to be the taxable person.

This provision ensures that tax does not remain uncollected due to ambiguity over the liable party.

Section 64(2): Remedy Against Summary Assessment Orders

To maintain fairness and accountability, Section 64(2) provides a remedy for those affected by a summary assessment order.

Options Available to the Taxable Person:

• The taxable person may file an application for withdrawal of the summary assessment within 30 days of receiving the order.

• The Additional Commissioner or Joint Commissioner may also withdraw the order on their own motion if they find it to be erroneous.

If withdrawn, the case proceeds under the regular assessment procedures as per Section 73, Section 74, or Section 74A of the CGST Act.

Recent Amendment:
Section 64(2) was amended by the Finance Act (No. 2) of 2024, effective from 16th August 2024, by inserting a reference to Section 74A, thus broadening the scope of reassessment procedures.

Summary Assessment vs Regular Assessment: Key Differences

Legal Safeguards and Compliance Tips

While Section 64 ensures revenue protection, taxpayers must be aware of their rights and responsibilities:

• Maintain updated documentation to defend against erroneous summary assessments.

• Respond promptly to notices or orders received.

• File for withdrawal within 30 days if the summary assessment is unjustified.

• Seek professional advice to navigate the complexities of Sections 64, 73, 74, and 74A.

Conclusion

Section 64 of the CGST Act serves as a powerful tool in the hands of GST authorities to tackle urgent tax recovery issues. However, its use is regulated through a combination of administrative approvals and judicial safeguards to prevent misuse. Understanding this provision, along with the recently added Section 74A, helps taxpayers stay compliant and prepared for any summary proceedings initiated under GST law.

For businesses and professionals, it is crucial to have a robust tax governance framework to mitigate risks arising from such summary assessments.

Need Expert Help with GST Compliance or Assessment Notices?

If you’ve received a summary assessment order or need help responding to GST authorities, our team of GST  experts and chartered accountants can guide you with timely and effective support. Contact us today at +91 9769647582 to ensure your interests are protected.