Uncertain value or rate needs an order, not a unilateral short payment
CGST Act section 60 provides provisional assessment where the taxable person cannot determine the value or applicable tax rate. A reasoned request, the proper officer’s order, and the prescribed bond/security process are essential. It is not a general instalment or cash-flow relief mechanism. The current Act and rule 98 text governs the ASMT-01 to ASMT-09 workflow discussed here, checked on 25 October 2026.
The section gives the officer up to ninety days from receipt of the request for the provisional-payment order. Final assessment ordinarily runs from communication of that order, with a six-month period. Extensions require sufficient cause and recorded reasons: the Joint/Additional Commissioner may extend for up to another six months and the Commissioner for a further period not exceeding four years. These are authorised extensions, not automatic additions to every case.
Document the uncertainty and secure the correct amount
Use ASMT-01 with supporting documents; ASMT-02 seeks more information and ASMT-03 carries the reply. Rule 98’s ASMT-04 order specifies the allowed value/rate and bond/security amount. ASMT-05 is the bond, with a bank guarantee as security. The security ceiling is 25% of the bond-covered amount; it is neither an automatic fixed 25% demand nor 25% of turnover. Rule 98’s amount includes the specified transaction taxes and cess. Reconcile each head before agreeing the guarantee schedule.
An order allowing one valuation method is not permission to apply another rate or treat every unrelated supply as provisional. Map invoices, returns and payments to the authorised scope and maintain an unresolved-issue register. Preserve receipt and communication evidence separately: they start different statutory clocks.
Finalisation, payment and release are separate actions
ASMT-06 calls for finalisation information, and ASMT-07 specifies the final payable or refundable amount. Reconcile provisional tax actually paid against final tax by period and head. Section 60(4) retains interest exposure for tax unpaid by its original statutory due date, through actual payment, whether paid before or after the final order. Do not start interest only when ASMT-07 arrives. This article’s examples compare principal amounts and do not assume an unverified interest period or rate.
After finalisation, apply in ASMT-08 for security release. Rule 98(7) requires the officer to ensure payment of the specified amount and issue ASMT-09 within seven working days of receipt of the release application. A refund or guarantee release is not automatic simply because accounts contain an overpayment. Section 60(5) connects a consequential refund with the relevant section 54 and section 56 conditions.
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Ninety-day order clock
Assume receipt of a complete request on 1 June 2026, excluding the receipt date in the interval. Ninety days later is 30 August 2026. This is a statutory-clock illustration, with no assumed holiday extension or deemed approval.
Illustrative example 2: Maximum guarantee on a bond
An authorised bond covers ₹12,00,000. The rule’s 25% ceiling gives ₹3,00,000 maximum security. If the order validly requires 20%, the guarantee is ₹2,40,000; the ceiling alone does not require the extra ₹60,000.
Illustrative example 3: Aggregate the specified tax heads
Assume the bond-covered transaction amount comprises ₹4,00,000 central tax, ₹4,00,000 State tax and ₹2,00,000 cess, with no other component. Covered amount is ₹10,00,000; 25% is ₹2,50,000. Omitting cess would incorrectly produce ₹2,00,000.
Illustrative example 4: Final principal shortfall
Final assessed tax is ₹9,60,000 against verified provisional tax paid of ₹7,20,000. Principal difference is ₹2,40,000. Interest must be separately assessed under section 60(4); it does not disappear because the final principal is paid immediately after the order.
Illustrative example 5: Final principal overpayment
Final tax is ₹6,50,000 and matched provisional payment is ₹7,00,000. Difference is ₹50,000 in the taxpayer’s favour, subject to the actual order and refund conditions. Do not book a second ₹7,00,000 refund or automatically offset an unrelated liability.
Illustrative example 6: Seven working days for release
Assume receipt of a proper release application on Monday 5 October 2026, payment conditions met, a Monday–Friday working calendar, no holidays, and counting from the next day. The seventh working day is Wednesday 14 October: 6, 7, 8, 9, 12, 13, 14 October. A simple seven-calendar-day calculation would instead give 12 October.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm the uncertainty | Document why value or rate cannot be determined and why section 60 is appropriate. |
| 2 | Prepare ASMT-01 | Attach transaction facts, legal alternatives and supporting valuation/rate evidence. |
| 3 | Record receipt | Preserve acknowledged receipt for the ninety-day order clock. |
| 4 | Respond to ASMT-02 | Submit a documented ASMT-03 response and reconcile additional information. |
| 5 | Read ASMT-04 | Identify authorised supplies, value/rate, bond amount and security percentage. |
| 6 | Execute ASMT-05 | Match bond and bank guarantee; test the 25% ceiling on the proper amount. |
| 7 | Track provisional compliance | Tie covered invoices, returns and payments to the order. |
| 8 | Prepare finalisation evidence | Respond to ASMT-06 and monitor the communication-based period and authorised extensions. |
| 9 | Reconcile ASMT-07 | Separate principal, interest, payments and any conditional refund. |
| 10 | Complete security release | File ASMT-08, prove payment conditions and follow up ASMT-09 using the working-day calendar. |
Sixteen practitioner FAQs
1. Is provisional assessment a cash-shortage facility?
No. The statutory issue is inability to determine value or rate.
2. Can the taxpayer choose a lower amount without an order?
The formal request, order and bond/security framework should be followed; an internal estimate is not equivalent.
3. Which form initiates the process?
ASMT-01 with supporting documents under rule 98.
4. How is additional information sought?
ASMT-02, with the applicant replying in ASMT-03.
5. What should ASMT-04 specify?
The permitted provisional basis and the relevant bond/security amount.
6. Is the security always exactly 25%?
No. That is the ceiling; read the actual lawful order.
7. Is turnover the denominator for that ceiling?
No. The rule refers to the amount covered under the bond.
8. Does the amount include cess?
Rule 98’s explanation includes cess and the stated tax heads payable in respect of the transaction.
9. What form records the bond?
ASMT-05, with the prescribed bank-guarantee security.
10. What starts the ordinary finalisation period?
Communication of the provisional order, not simply preparation of the original request.
11. Are all extensions automatic?
No. The statute requires sufficient cause and reasons recorded by the appropriate authority.
12. Which form calls for finalisation records?
ASMT-06.
13. Which form specifies the final result?
ASMT-07, including the amount payable or refundable as applicable.
14. Does interest start only at final assessment?
No. Section 60(4) refers to the original tax due date and actual payment.
15. Is ASMT-08 itself a security-release order?
No. It is the application; ASMT-09 is the release order after the required checks.
16. Can working days be treated as calendar days?
No. Apply the actual working/holiday calendar and identify the receipt date and counting assumption.
Conclusion
Use section 60 and rule 98 to document value or rate uncertainty, reconcile bond security, final tax and payment, and complete ASMT-08/09 release.