ASMT-02 GST Notice: Provisional Assessment Reply Guide | Section 60
Provisional assessment under GST is one of those provisions most businesses never need, until suddenly they do. The situation is specific: you need to supply goods or services, a tax payment is due, but you genuinely cannot determine either the correct value of the supply or the applicable rate of tax. You are not avoiding payment. You simply cannot compute what to pay with confidence.
Section 60 of the CGST Act was designed precisely for this situation. It allows you to apply for provisional tax payment while the question of value or rate gets sorted out. The ASMT-02 notice is what arrives when the proper officer, after receiving your provisional assessment application in ASMT-01, needs additional documents or clarifications before approving your request.
This is not a demand notice. It is not a scrutiny notice. It is part of a process you initiated. The officer is asking for more information so they can process what you asked for.
What Is Section 60 Provisional Assessment and Who Uses It?
<cite index="2-1">Section 60 of the GST Act permits a taxable person to make a provisional assessment of goods or services if they are unable to ascertain the value or rate of tax applicable.</cite>
Two distinct situations create genuine need for provisional assessment:
Uncertainty about the applicable tax rate: This happens when the classification of goods or services is genuinely ambiguous. For example, a manufacturer supplying a new type of composite product that could fall under two different HSN codes with different tax rates — one at 12% and one at 18% — faces a real classification problem. Paying at the wrong rate creates either a short-payment risk or an overpayment that ties up working capital.
Uncertainty about the value of supply: Certain transactions involve value determination that is genuinely complex and unsettled at the time of supply, for instance, related party transactions where transfer pricing considerations apply, or supplies where the consideration is partly in kind and partly in cash.
<cite index="4-1">A taxable person may ask the proper officer for payment of tax on a provisional basis if they are having trouble estimating the value or tax rate for goods or services. This request must be submitted in writing and include a thorough justification for why a provisional evaluation is necessary. The assessee should provide the application including the pertinent documents, electronically</cite> in Form GST ASMT-01 on the GST common portal.
One clarification worth making explicitly: provisional assessment is not a mechanism for deferring payment when you know what you owe. It is specifically for genuine uncertainty about value or rate. Using it as a cash flow tool when the correct liability is determinable would be misuse of the provision.
What Is an ASMT-02 Notice?
<cite index="5-1">The proper officer may, on receipt of the application under sub-rule (1), issue a notice in FORM GST ASMT-02 requiring the registered person to furnish additional information or documents in support of his request and the applicant shall file a reply to the notice in FORM GST ASMT-03, and may appear in person before the said officer if he so desires.</cite>
The ASMT-02 notice is the officer's first response to your ASMT-01 application. It does not mean your request has been rejected. It means the officer has reviewed what you submitted and needs more supporting material before they can approve provisional payment.
Common reasons an ASMT-02 is issued:
The ASMT-01 application did not sufficiently explain why the rate or value cannot be determined. The classification dispute was described but the competing HSN codes and their rates were not compared in detail. Documents supporting the claimed basis for uncertainty were missing. The officer needs a legal opinion, a valuation report, or technical specifications to understand the nature of the supply.
How to Respond: Filing ASMT-03
<cite index="7-1">ASMT-03 is a reply to the seeking of additional information, clarification, and documents of FORM GST ASMT-02. The applicant shall file a reply to the notice in FORM GST ASMT-03 and may appear in person before the said officer.</cite>
Your ASMT-03 reply should be structured to address every point raised in the ASMT-02. Do not submit a generic response: address each specific information gap the officer has identified.
Typical documents to include depending on the nature of the uncertainty:
For rate disputes: technical specifications of the product, comparison of competing HSN codes with their descriptions and applicable rates, any advance ruling or industry guidance on classification of similar products, and your internal legal analysis of why the classification is genuinely ambiguous.
For value disputes: the complete contract or agreement governing the supply, the transfer pricing documentation if the transaction is between related parties, any earlier correspondence with the GST department on this valuation question, and the methodology you are proposing to use for provisional valuation.
In all cases: a clear explanation of what the uncertainty is, why it cannot be resolved at the time of supply, and what value or rate you are proposing to apply provisionally while the question is resolved.
You can also request a personal hearing through your ASMT-03 if you believe a face-to-face explanation would be more effective than a written submission alone.
What Comes Next: ASMT-04, ASMT-05 and the Bond Requirement
<cite index="1-1">The proper officer shall issue an order for provisional assessment in ASMT-04 within 90 days</cite> of receiving your application. This is a statutory outer limit, not a target timeline.
<cite index="3-1">The officer calls for records via FORM GST ASMT-06 and thereafter passes a final assessment order in FORM GST ASMT-07, determining the payable amount or the refundable amount.</cite>
The ASMT-04 order specifies:
- The value or rate (or both) to be applied provisionally
- The amount for which a bond must be executed
- The security required
<cite index="8-1">The security will not exceed twenty-five percent of the bond amount.</cite> The bond is furnished in Form GST ASMT-05. Security takes the form of a bank guarantee.
The bond and security requirement is the part that catches most businesses off guard. Before provisional payment can begin, you must execute the bond and provide the bank guarantee. The bond covers the potential differential between the provisional tax paid and the final tax determined after assessment. The security deposit ensures the department has recourse if the final liability is higher and remains unpaid.
The Final Assessment: ASMT-06 and ASMT-07
After provisional payment has been made and the question of rate or value is eventually resolved, the officer finalises the assessment.
<cite index="2-1">The proper officer would issue a notice in Form GST ASMT-06 when the provisional assessment gets completed. The same notice shall ask the enrolled individual to furnish the required details and records for the assessment finalisation. In Form GST ASMT-07 a final assessment order shall be issued which cites the liable amount to get paid or the amount refundable if applicable.</cite>
<cite index="2-1">From the communication date of the order issued under sub-section (1) to pass the final assessment order the proper officer would have a period of up to 6 months. The Joint Commissioner or Additional Commissioner, however, may extend this time frame for a maximum of six months, or the Commissioner for a maximum of four years if justification is presented and the reasons are recorded in writing.</cite>
Two outcomes are possible from ASMT-07:
Final tax is higher than provisional payment: You owe the difference, plus interest at 18% per annum from the original due date of payment until the date of actual payment of the shortfall.
Final tax is lower than provisional payment: You are entitled to a refund of the excess paid, with interest.
<cite index="2-1">The registered person shall be responsible for paying interest at a GST rate of 18% per year if tax owed under a provisional assessment is not paid by the deadline.</cite>
Releasing the Security After Final Assessment
Once the ASMT-07 final order is passed and any differential tax has been paid, the bond and bank guarantee are no longer needed.
<cite index="4-1">The applicant may file an application in FORM GST ASMT-08 for the release of the security furnished under sub-rule (4) after issue of the order under sub-rule (5). The proper officer shall release the security and provide the order in FORM GST ASMT-09 within 7 working days from the application receipt on validating that the said amount would get paid.</cite>
File ASMT-08 promptly after the final assessment is settled to release the bank guarantee and free up the security. The seven-working-day timeline for ASMT-09 is statutory.
The Complete Provisional Assessment Form Chain
Understanding the full sequence helps you track where you are in the process at any point:
| Form | Who Files | Purpose |
|---|---|---|
| ASMT-01 | Taxpayer | Application for provisional assessment |
| ASMT-02 | Officer | Notice seeking additional information |
| ASMT-03 | Taxpayer | Reply to ASMT-02 |
| ASMT-04 | Officer | Provisional assessment order (within 90 days) |
| ASMT-05 | Taxpayer | Bond furnishing |
| ASMT-06 | Officer | Notice for information for final assessment |
| ASMT-07 | Officer | Final assessment order |
| ASMT-08 | Taxpayer | Application for release of security |
| ASMT-09 | Officer | Order releasing security (within 7 working days) |
People Also Ask: ASMT-02 GST Notice
What is provisional assessment under Section 60 of GST? Section 60 of the CGST Act allows a registered person to pay tax on a provisional basis when they genuinely cannot determine the applicable rate of tax or the value of supply at the time of the transaction. The taxpayer applies in ASMT-01, the officer may seek additional information through ASMT-02, and after reviewing the reply in ASMT-03, issues a provisional assessment order in ASMT-04 within 90 days.
What is ASMT-02 and why did I receive it? ASMT-02 is a notice issued by the proper officer after receiving your provisional assessment application in ASMT-01. It asks for additional information or documents to support your request before the officer can approve provisional payment. It does not mean your application has been rejected.
How do I reply to an ASMT-02 notice? File your reply in Form ASMT-03 on the GST portal. Address each specific point raised in the ASMT-02 notice, attach all requested documents, and include a clear written explanation of the nature of the rate or value uncertainty. You can also request a personal hearing if you want to present your case in person.
Is a bond mandatory for provisional assessment? Yes. Provisional assessment under Section 60 requires execution of a bond in Form ASMT-05 and furnishing of security in the form of a bank guarantee. The security cannot exceed 25% of the bond amount. The ASMT-04 order specifies the exact amounts.
How long does the officer have to finalise a provisional assessment? The officer has six months from the date of communication of the provisional assessment order (ASMT-04) to issue the final assessment order in ASMT-07. This period can be extended by the Joint Commissioner or Additional Commissioner for a further six months, and by the Commissioner for up to four years.
What interest applies if the final tax exceeds the provisional payment? Interest at 18% per annum applies on the shortfall from the original due date of payment to the date of actual payment of the balance. This interest applies under Section 50 of the CGST Act.
Can I appeal against a final assessment order under ASMT-07? Yes. A final assessment order in ASMT-07 can be challenged in appeal under Section 107 of the CGST Act before the Appellate Authority within three months of the order being communicated.
Real Questions People Ask About ASMT-02 and Provisional Assessment
"We supply a new type of product and are genuinely unsure whether the correct GST rate is 12% or 18%. We cannot delay the supply. Is provisional assessment the right route?" Yes, this is exactly the scenario Section 60 was designed for. File your ASMT-01 application with a detailed explanation of the classification issue, the two competing HSN entries you have identified, and the technical or legal basis for the ambiguity. If the officer issues an ASMT-02, respond in ASMT-03 with full technical specifications and your rate analysis. You pay at the provisionally approved rate while the correct classification is determined, then settle any differential plus interest after ASMT-07.
"I received an ASMT-02 asking for documents I submitted with my original ASMT-01 application. Do I have to submit them again?" Yes. The officer may need them formally on record as part of the ASMT-03 reply, even if they were attached to ASMT-01. Resubmit them through ASMT-03 with a note referencing that they were part of the original application. Do not assume the officer has access to the ASMT-01 attachments when reviewing ASMT-03.
"The ASMT-04 order came and the bond amount is very large. Can we negotiate or reduce it?" The bond amount covers the potential differential tax exposure. It is set by the officer based on the estimated transaction value. If you believe it is disproportionate, you can represent this to the officer with calculations showing why the realistic differential exposure is lower. The security (bank guarantee) is capped at 25% of the bond amount, which does limit the liquidity impact. In practice, the bank guarantee requirement is the more significant operational constraint for most businesses.
"We completed a provisional assessment two years ago and have since filed ASMT-08 for security release, but have not received ASMT-09. What should we do?" The statutory timeline for ASMT-09 is seven working days from ASMT-08 receipt. If that period has long passed, file a written grievance with your jurisdictional GST officer citing the statutory timeline and requesting the security release order. If the grievance goes unanswered, escalate through the GST portal grievance mechanism or approach the Commissioner's office directly.
Received an ASMT-02 notice and unsure what additional documents the officer needs or how to structure your ASMT-03 reply? Upload the notice to our AI tool. It reads the specific information gaps identified by the officer and helps you prepare a complete, document-backed ASMT-03 response.