Section 60 – Provisional Assessment
Section 60 of CGST Act, 2017 – Provisional Assessment
Updated on: February 2026 (as applicable till date)
Prepared by: Yours Tax Consultant
1. Purpose and Importance of Section 60
Section 60 provides a mechanism for provisional assessment where a registered person is unable to determine the correct value of supply or the applicable rate of tax.
This provision allows business continuity without forcing taxpayers to guess tax liability and risk penal consequences.
2. Statutory Provision – Section 60
Section 60(1):
Subject to the provisions of sub-section (2),
where a registered person is unable to determine
the value of supply of goods or services or both
or the rate of tax applicable thereto,
he may request the proper officer in writing
to pay tax on a provisional basis.
Section 60(2):
The proper officer shall pass an order,
within such period as may be prescribed,
allowing the payment of tax on a provisional basis
at such rate or on such value as may be specified.
Section 60(3):
The proper officer shall pass the final assessment order
within six months
from the date of the communication of the order
issued under sub-section (2).
Proviso:
The said period of six months may be extended
by the Joint/Additional Commissioner
for a further period not exceeding six months,
and by the Commissioner
for a further period not exceeding four years.
3. When Can Provisional Assessment Be Opted?
Provisional assessment can be sought when there is:
- Uncertainty in classification of goods or services
- Doubt regarding applicable GST rate
- Difficulty in determining transaction value
Mere convenience or cash flow issues are not valid grounds.
4. Application for Provisional Assessment
The registered person must:
- Make a written request to the proper officer
- Clearly state reasons for uncertainty
- Provide supporting documents
Relevant Rule:
5. Bond and Security Requirement
To obtain provisional assessment:
- Taxpayer must execute a bond
- Bond covers the difference between provisional and final tax
- Security (bank guarantee) may be required
This protects Government revenue.
6. Final Assessment – Time Limit
Final assessment must be completed:
- Within 6 months from provisional order
Extensions:
- +6 months by Joint/Additional Commissioner
- +4 years by Commissioner
Total possible extension reflects complexity of disputes.
7. Interest Consequences – Section 60(4) & (5)
If final tax is:
- More than provisional tax:
- Interest payable from due date of tax
- Less than provisional tax:
- Refund payable with interest under Section 56
Thus, provisional assessment is revenue-neutral.
8. Provisional Assessment vs Self-Assessment
- Section 59: Self-assessment by taxpayer
- Section 60: Assessment with officer’s permission
Section 60 is an exception to self-assessment.
9. Practical Examples
- Classification dispute between 12% and 18% GST
- Valuation issue in related-party transactions
- Composite vs mixed supply confusion
10. Related Provisions
- Section 59 – Self-assessment
- Section 56 – Interest on delayed refunds
- Rule 98 – Provisional assessment
11. Professional Insight
Provisional assessment is a protective shield, not a loophole. Use Section 60 proactively in classification or valuation doubts to avoid future litigation, interest and penalty.
Disclaimer: This article is prepared based on the CGST Act, CGST Rules, notifications and prevailing legal position as applicable till date. Provisional assessment is discretionary and subject to officer approval.
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