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GST SOP on GST returns scrutiny for FY 2019-20, 2018-19 and 2017-18

Updated on: Jan 9th, 2025

4 min read

The provisions for scrutiny of GST returns are specified under Section 61 of the Central Goods and Service Tax Act, 2017 and Rule 99 of the CGST Rules, 2017. A Scrutiny Module for online scrutiny of returns has been made available in May 2023 for scrutiny of returns filed in FY 2019-20 onwards. Thus, the Central Board of Indirect Taxes and Customs (CBIC) has issued two SOP (Standard Operating procedures) to ensure uniformity in selecting returns for scrutiny in 2022 for FY 2017-18 and FY 2018-19 as well as in 2023 for FY 2019-20 onwards.

Section 61 Scrutiny of returns

The proper officer shall scrutinise the return filed by the registered taxpayer for its correctness and notify the discrepancies identified to the taxpayer.
If the proper officer is satisfied with the taxpayer’s explanation of discrepancies, no further action will be taken.
If the taxpayer fails to provide a proper explanation within 30 days of being informed by the proper officer or fails to take corrective measures in his return for the month in which such discrepancy is accepted, then the proper officer can take appropriate action under section 65, section 66 or section 67 or calculate the tax payable along with other dues as per section 73 or section 74 of the CGST Act.

Note: The Superintendent of Central Tax is assigned as a proper officer for performing functions as stated under section 61 of the CGST Act, 2017.

Rule 99 Scrutiny of returns

When a return is selected for scrutiny, the proper officer shall scrutinise the same as per section 61 based on information available to him. The discrepancies shall be intimated to the taxpayer via Form GST ASMT-10 and seek his explanation within 30 days of notice.
The registered taxpayer accepts the discrepancy, makes the payment of tax via GST DRC-03 and explains the discrepancy vide Form GST ASMT-11.
On satisfactory response, the proper officer may inform the taxpayer via Form GST ASMT-12.

Selection of returns for scrutiny

The Directorate General of Analytics and Risk Management (DGARM) selects the GSTIN whose returns are to be scrutinised. They then communicate the same to the field formations through the DDM portal, until April 2023, for further action for scrutiny of FY 2017-18 and 2018-19.

As per the update in May 2023, the department has introduced the automated return scrutiny module from returns filed in FY 2019-20 onwards. It ensures minimal manual intervention in the adjudication process, making it more transparent, efficient and bridges any gaps leading to tax evasion. So, the DGARM will make the list of GSTINs available through the DG systems on the scrutiny dashboard of the officers on the ACES-GST application.

Scrutiny Schedule

is a month-wise schedule prepared by the proper officer for scrutiny regarding all GSTINs selected. The priority may be based on the revenue implication involved. The proper officer shall conduct scrutiny of three GSTINs per month until April 2023 as per SOP for FY 2017-18 and 18-19. Whereas, the number shall be four GSTINs per month with online scrutiny as per SOP for FY 2019-20 and later years from, May 2023 onwards. In any case, GSTINs with a higher revenue implications shall be prioritised.

Process of scrutiny

The proper officer scrutinises the return for its correctness based on the information available on the system in various forms and statements filed by the registered taxpayer and other sources such as DGARM, ADVAIT, E-way Bill portal etc.
An indicative list of parameters (Annexure B) to be verified is available with the proper officer. But, it is just indicative and not exhaustive. He may consider any other parameter as deemed fit.
Further, the proper officer is expected to depend on the information available to the Department itself. He should have a minimal interface with the taxpayer and normally should not ask for documents from the taxpayer before the issuance of Form GST ASMT-10.
The proper officer shall issue a notice to the taxpayer indicating all the discrepancies noticed and seek his explanation thereon in Form GST ASMT-10. The officer shall quantify the tax, interest, and other such sums payable regarding the discrepancies noticed. If the registered taxpayer has already made the additional tax payment through Form GST DRC-03, then the same should be considered while communicating discrepancies to the taxpayer in Form GST ASMT-10.
For each selected GSTIN, the proper officer must scrutinise all the returns of the corresponding financial year and issue a single notice via Form GST ASMT-10.
The taxpayer may accept the discrepancy and make payment through Form GST DRC-03. The taxpayer can explain the discrepancy via Form GST ASMT-11. If the response is satisfactory, the proper officer can conclude the proceedings by informing the registered person in Form GST ASMT-12 on the portal.
In case no explanation is provided by the taxpayer or fails to pay tax within 30 days of intimation, the proper officer may proceed to determine the tax and other dues as per sections 73 and section 74. The officer may refer the matter to the Jurisdictional Principal Commissioner or Deputy Commissioner if he believes that an audit or investigation is required to determine the correct amount of liability. They can then decide whether the matter needs to be referred to the Audit Commissionerate or Anti Evasion Wing.

Timeline for scrutiny of returns

The scrutiny of returns shall be completed in a specified period to safeguard revenue. Below are some of the timelines:

Sr. No.	Process	Timeline
1	Communicating the list of GSTINs selected for scrutiny by the DGARM to the nodal officer	From time to time
2	Communicating the list of GSTINs selected for scrutiny by the nodal officer to the proper officer	Within 3 working days from the date of receipt of the list of GSTINs from the DGARM (not applicable for online scrutiny from FY 2019-20 onwards)
3	Finalisation of scrutiny schedule with the Assistant/ Deputy Commissioner	Within 7 working days of receipt of the list of GSTINs from the nodal officer (from 19-20 scrutiny onwards, it is available online on ACES portal)
4	Sharing the scrutiny schedule with the DGGST	Within 30 days of receipt of the list of GSTINs from DGARM
4	Issue of notice in Form GST ASMT-10	Within a month as specified in the scrutiny schedule
5	Issue of response in GST ASMT-11	Within 30 days of receipt of notice under GST ASMT-10
6	Issue of order in Form GST ASMT-12	Within 30 days of receipt of response in Form GST ASMT-11
7	Initiating action for determining tax under section 73 and section 74	If the reply is received: Within 30 days from receipt of reply in GST ASMT-11. If the reply is not received: Within 15 days of completion of 30 days of service of notice in GST ASMT-10 or further period as may be notified by the proper officer.
8	Reference to Commissioner for taking appropriate action under section 65, section 66 or section 67	If the reply is received: Within 30 days from receipt of reply in GST ASMT-11. If the reply is not received: Within 45 days of service of notice in GST ASMT-10.

Reporting and Monitoring

A Scrutiny Register is maintained by the proper officer for all the GSTINs allotted for scrutiny. The format is mentioned in Annexure C. For scrutiny from the FY 2019-20 onwards, MIS report of scrutiny register along with the 'Monthly Scrutiny Progress Report' is available on the dashboard of the officer over the ACES portal.

The progress of the scrutiny is monitored by the jurisdictional Principal Commissioner every month. The proper officer shall prepare a scrutiny progress report at the end of every month as mentioned in Annexure D. This report shall be forwarded to the Director-General of Goods and Service Tax by the Principal Chief Commissioner of the concerned zone by the 10th of the succeeding month. The DGGST shall submit this report to the Board by the 20th of the corresponding month.

This SOP is designed to help the department use technology and risk-based tools to scrutinise returns properly. Instruction No. 02/2022 issued on 22nd March 2022 shall be followed for the scrutiny of returns for the financial years 2017-18 and 2018-19 whereas the Instruction No. 02/2023 issued on 26th May 2023 will be followed along with the previous instruction for FY 2019-20 onwards.

List of risk parameters for selection of GST returns for scrutiny

The tax liability in Tables 3.1(a) and (b) of GSTR-3B must match with tax liability in Tables 4,5,6,7A(1),7B(1),11A and 11B of GSTR-1 (net of amendments in Tables 9,10, and 11(II)).

Advances adjusted are accurately reflected by reporting the same in Table 11B and Tables 4, 5, 6 and 7 of GSTR-1.

Reporting and paying in cash the exact tax liability under the reverse charge mechanism using Tables 3.1(d) for tax liability and 4(A)(2) and 4(A)(3) for ITC claimed on it in GSTR-3B. Make sure that value in GSTR-3B is more than the eligible ITC in Tables 3,4,5 and 6 of GSTR-2A.

Reporting and paying in cash the exact tax liability under the reverse charge mechanism using Tables 3.1(d) for tax liability and 4(A)(2) and 4(A)(3) for ITC claimed on it in GSTR-3B. Make sure that value in GSTR-3B is more than the eligible ITC in Tables 3,4,5 and 6 of GSTR-2A.

ITC claimed in Table 4(A)(4) of GSTR-3B must match with amounts marked as eligible ITC in Table 7 of GSTR-2A (net of amendments in Table 8).

Sales subject to TCS or TDS under GST in GSTR-3B must match the TDS and TCS credit reflected under Column 6 of Table 9 of the GSTR-2A.

In Table 3.1(a) and (b) of the GSTR-3B, the tax liability should match the corresponding e-way bills.

ITC is ineligible for claims for the period after the effective date of cancellation of the suppliers’ GST registrations, especially in case of retrospective cancellation of GST registrations.

The GSTR-3B filing status of respective vendors must not be ‘No’ while claiming ITC of such invoice or debit note in the GST returns, despite it appearing in the GSTR-2A.

Do not claim such ITC if the relevant period’s GSTR-3B is filed after the last date allowed under Section 16(4) of the CGST Act, i.e., 30th November of the year following the financial year in which such invoice/debit note is raised or date of filing annual returns, whichever is earlier.

ITC on import of goods in Table 4(A)(1) of GSTR-3B must match with amounts in Tables 10 and 11 of GSTR-2A and data on ICEGATE.

Adhere to CGST Rules 42 and 43 for accurate reversals of ITC in Table 4(B) of GSTR-3B.

Do not miss computing and making late fee/interest payments as per Sections 47 and 50 of the CGST Act wherever return filing/tax payment is delayed.

About the Author

Annapoorna

Assistant Manager - Content

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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