Every GST-registered business must ensure timely filing of their GST returns. When discrepancies or inconsistencies are detected, tax authorities initiate a scrutiny process. With automated scrutiny mechanisms, taxpayers are required to maintain consistency between various GST returns.
This article explains the GST scrutiny assessment process, how taxpayers can respond to notices, and how Smart GST Desk Pro simplifies compliance.
What is a GST Scrutiny Assessment?
A scrutiny assessment involves a detailed examination of a taxpayer’s GST returns by a tax officer based on risk parameters. If inconsistencies are observed, a scrutiny notice is issued requesting clarification. Unlike regular assessments, scrutiny assessments do not involve personal hearings.
Taxpayers are expected to pay any differential tax with interest before replying. If the reply resolves concerns, proceedings are closed via Form ASMT-12. Otherwise, further actions may include:
- Failure to respond or settle tax within 30 days.
- Unsatisfactory explanation.
- Tax audit under Section 65, special audit under Section 66, or survey/inspection under Section 67.
- Recovery measures under Sections 73/74.
Objective of GST Scrutiny Assessment
- Verify correctness of claimed Input Tax Credit (ITC).
- Check accuracy of tax declared vs tax paid.
- Detect misuse of exemptions or ineligible ITC claims.
Risk parameters help officers determine scrutiny. High-risk discrepancies or suspected fraud may trigger automated scrutiny. Prompt attention is crucial to avoid escalation.
Buy Smart GST Desk Pro
One-Time License
Lifetime access with all future updates included.
Instant secure checkout via Microsoft.
Role of Smart GST Desk Pro
As a Taxpayer: Automatically reconciles ITC claimed vs actual ITC, flags anomalies in GSTR-1, 2A, and 3B, and generates ready-to-submit ASMT-11 responses.
As a GST Officer: Analyzes return discrepancies, generates reports for potential scrutiny, and tracks taxpayer responses efficiently.
Automated Return Scrutiny Module
Introduced in May 2023 for FY 2019-20 onwards, this module is part of the ACES-GST backend and allows officers to efficiently conduct GST scrutiny. For taxpayers, this means:
- Increased notice issuance and higher compliance risk.
- Need for robust invoicing, accurate reconciliations, timely filing, and quick responses.
Smart GST Desk Pro helps with automated discrepancy detection, ITC validation, mismatch reports, and quick ASMT-11 reply generation.
Scrutiny Notice: ASMT-10 Details
- Form: ASMT-10 highlights discrepancies, tax, interest, and penalties; replies are filed in ASMT-11.
- Mode: Notices via SMS, email, or GST portal.
- Timelines: Respond within 30 days; possible extension of 15 days.
- Contents: GSTIN, taxpayer details, discrepancy observed, officer details, status updates.
Responding to a Scrutiny Notice with ASMT-11
Before replying, verify notice details and settle tax if payable. Taxpayer options include:
- Paying tax using Form DRC-03.
- Adjusting ITC or tax in GSTR-3B.
- Providing amended invoices or debit notes in GSTR-1.
Step-by-step ASMT-11 filing:
- Go to 'Replies' tab.
- Add notice reply with explanation and payment details.
- Attach supporting files.
- Tick verification, enter signatory, preview, and file via DSC/EVC.
Smart GST Desk Pro automates this process, tracks deadlines, and integrates payments from tax ledger.
Post-Reply Procedure
- If satisfied, officer issues ASMT-12 closing the case.
- If unsatisfied, an order demanding tax, interest, or penalty may be issued.
- Orders are accessible under the 'Orders' tab in GST portal.
Smart GST Desk Pro maintains digital records of replies, payments, and documents for audits.
Consequences of Ignoring a Scrutiny Notice
- Demand notices under Section 73 (non-fraud) or Section 74 (fraud).
- Penalties and interest based on discrepancy type.
- Recommendations for audits under Sections 65, 66, or 67.
Smart GST Desk Pro keeps taxpayers compliant via alerts, auto-reconciliation, and ready-to-file responses to prevent escalation.
