STANDARD OPERATING PROCEDURE FOR SCRUTINY OF GST RETURNS FROM
The Goods and Services Tax Act 2017 came into force with effect from 1.7.2017 in India.
The Central Government has issued Standard operating Procedure for Scrutiny of GST Returns from the Financial Year 2019-20 in Instruction No. 2-2022-GST as follows.
Instruction No. 02/2023-GST
F. No. CBIC- 20006/04/2022-GST
Government of India
Ministry of Finance Department of Revenue
Central Board Indirect Taxes
& Customs
GST Policy Wing
New Delhi, dated 26th May, 2023
To,
All
the
Principal Chief
Commissioners/ Chief
Commissioners/ Principal Commissioners
/Commissioners
of
Central Tax
All the Principal Directors
General/ Directors General of Central Tax
Madam/Sir,
Subject: Standard Operating Procedure for Scrutiny of Returns for FY 2019-20 onwards–
reg.
Attention is invited to the Instruction No. 02/2022-GST dated 22nd March, 2022, wherein
a Standard Operating Procedure (SOP) was provided for scrutiny of returns under section 61 of
Central
Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act) read with
rule 99 of Central Goods and Service Tax Rules, 2017 (hereinafter referred to as “the CGST
Rules”) for FY 2017-18 and 2018-19. It was mentioned in the said instruction
that the said SOP was issued as an interim measure till the time a Scrutiny Module for online scrutiny of returns is
made available on the ACES-GST application.
1.2 In this regard, it is to inform that DG Systems has developed functionality “Scrutiny of Returns”, containing the online workflow for scrutiny of returns in the CBIC ACES-GST
application.
Advisory No.
22/2023- Returns dated 16.05.2023
has also been issued
by DG Systems in this regard, along with a User Manual providing for the detailed workflow of the said functionality. The GSTINs selected for scrutiny for the Financial Year 2019-20 have also been made available on the scrutiny dashboard of the proper officers
on
ACES-GST application.
1.3 The functionality provides for the detailed workflow for communication of
discrepancies noticed, in relation to the details furnished in the returns, by the proper officer in FORM GST ASMT-10 to the registered person, receipt of reply from the registered person in FORM GST
ASMT-11, issuance of order in FORM GST ASMT-12 or taking further action for issuance of
show cause notice under Section 73 or 74 of CGST Act, 2017 or for referring the matter for
Audit or investigation, as the case may be.
2. In view of this, the SOP for scrutiny of returns provided in the Instruction No. 02/2022- GST dated 22nd March 2022 stands modified to the following extent in respect of scrutiny of returns for financial years 2019-20 onwards:
3. Selection of returns for scrutiny and communication of the same to the field formations:
3.1 Selection of returns for scrutiny
will be done by the Directorate General of Analytics and Risk Management (DGARM) based on various
risk parameters identified by them. DGARM will select the GSTINs registered with the Central Tax authorities, whose returns
are to be scrutinized
for a financial year, based on identified risk parameters. The details of
GSTINs selected for
scrutiny for a financial year will be made available by DGARM through DG Systems on the
scrutiny dashboard of the concerned proper officer of Central Tax on ACES-GST application.
3.2 The details of the risk parameters, in respect of which risk has been identified for a particular GSTIN, and the amount of tax/ discrepancy involved in respect of
the concerned risk
parameters (i.e. likely revenue implication), will also be shown on the scrutiny dashboard of the proper officer for their convenience. It is re-emphasized that as
the data made available on the dashboard has been generated at a particular point of time for calculation of risk parameters, this
data may undergo change at the time of scrutiny of returns, due to subsequent compliances
carried out by the taxpayer or by the suppliers of the taxpayer. The proper officer shall, therefore,
rely upon the latest available data.
4. Scrutiny Schedule:
4.1 Once the details of GSTINs selected for scrutiny for a financial year are made available
on the scrutiny dashboard of the concerned proper officer of Central
Tax on ACES-GST application, the proper officer, with the approval
of
the divisional Assistant/ Deputy
Commissioner, shall finalize a scrutiny schedule in the format specified in Annexure A of
Instruction 02/2022- GST dated 22nd March 2022. Such scrutiny
schedule will specify month- wise schedule for scrutiny in respect of all the GSTINs selected for scrutiny. While preparing the scrutiny schedule, the scrutiny of the GSTINs, which appear to be riskier based on the likely higher revenue implication indicated on
the dashboard, may be prioritized. The Principal
Commissioner/ Commissioner of the concerned Commissionerate will monitor and ensure that the schedule identified in Scrutiny Schedule is adhered to by the officers
under his jurisdiction.
4.2 The proper officer shall conduct scrutiny of returns pertaining to minimum
of 4 GSTINs
per month. Scrutiny of returns of one GSTIN shall mean scrutiny of all returns pertaining to a financial year for which the said GSTIN has been selected for scrutiny.
5. Process of scrutiny by the Proper Officer:
5.1 The Proper Officer shall scrutinize the returns and related particulars furnished by
the
registered persons to verify
the correctness of the returns. Information available with the proper
officer on the system in the form
of
various returns and statements furnished by the registered person and the data/ details made available through various sources like DGARM, ADVAIT, GSTN, E-Way Bill Portal etc.
may be relied upon for this
purpose.
5.2 As mentioned in Para 3.2 above, for the convenience of proper officers, details of the risk
parameters involving risk/ discrepancies in respect of the GSTIN, along with the amount of tax/ discrepancy
involved
in respect of
the
concerned risk
parameters
(i.e. likely revenue implication), will be made available in the scrutiny dashboard of the proper officer. Besides, DGARM will also make available to the field formations the details of
all the risk parameters taken into consideration by them for the selection
of
GSTINs for scrutiny of returns for the particular financial year. In addition to these parameters, proper
officer may also consider any
other relevant parameter, as
he
may deem fit, for the purpose of scrutiny.
5.3 It may be noted that
at this stage, the proper officer
is expected to rely upon the information available with him on records. As far as possible, scrutiny of return should have minimal interface
between
the proper
officer and the
registered person and,
there
should
normally not be any need for seeking documents/ records from the registered persons before issuance of FORM GST ASMT-10.
5.4 The proper officer shall issue a notice to the registered person in FORM GST ASMT-10
through the scrutiny functionality on ACES-GST application, informing him of the discrepancies noticed and seeking his
explanation thereto. There may be cases
where the registered person may already have made additional payment of tax, cess, interest, etc. after filing of the returns for the
relevant tax period, through FORM DRC-03. The payments thus made through FORM DRC-
03 may also be taken into consideration while communicating discrepancies to the taxpayer in
FORM GST ASMT-10. The notice in FORM GST ASMT-10, issued by the proper officer through scrutiny functionality on ACES-GST application, shall be communicated by the system
to the concerned registered person on
the common portal and therefore, there will be no need for sending any manual communication of notice in FORM GST
ASMT-10 by
the proper officer to the registered person separately. While issuing such notice, the proper officer may, as far as possible, quantify the amount of tax, interest and any
other amount payable in relation to such
discrepancies. It may also be ensured that the discrepancies so communicated should, as far as
possible, be specific in nature and not vague or general. In this regard, the user manual issued by DG Systems may be
referred to regarding the detailed procedure for issuance of FORM GST
ASMT-10 on
scrutiny functionality on
ACES-GST application. The proper officer shall mention the parameter-wise details of
the discrepancies noticed by him in FORM GST ASMT-10 and
shall also upload the worksheets
and supporting document(s)/ annexures, if any.
5.5 For each GSTIN identified for scrutiny, the proper officer is required to scrutinize all the
returns pertaining to the corresponding Financial Year under consideration
and a single compiled
notice in FORM GST
ASMT-10 may be issued to the registered person for that financial year.
5.6 On receipt of such notice in FORM GST ASMT-10
on common portal, the registered person may accept the discrepancy ment ioned in the said notice, and pay the tax, interest and any
other amount arising from
such discrepancy and inform
the same or may furnish an explanation
for the discrepancy in FORM GST ASMT-11, through the common portal, to the proper officer within the time period prescribed under rule 99 of CGST Rules.
5.7 The reply furnished by the registered person in FORM GST ASMT-11 on
the common
portal shall be made available to the concerned proper officer in the scrutiny dashboard on
ACES-GST application. Where the explanation furnished by the registered person or the information submitted in respect of acceptance of discrepancy and payment of dues is found to be
acceptable
by the proper
officer,
he shall
conclude the proceedings by informing the registered person in FORM GST ASMT-12
through the scrutiny functionality on ACES-GST
application.
5.8 In case no satisfactory explanation is furnished by the registered person in FORM GST
ASMT-11 within a period of thirty
days of being informed by the proper officer or such further period as may be permitted by
him or where the registered person, after accepting the
discrepancies, fails to pay the tax, interest and any other amount arising from such discrepancies, the proper officer, may proceed to determine the tax and other dues under section 73 or section
74 of CGST Act. Needless to mention, for proceedings under section 73 or section 74 of
CGST Act, monetary limits as specified in Circular
No. 31/05/2018-GST
dated 9th February 2018
shall be adhered to. The user manual issued by
DG Systems may be referred to for the procedure for initiating proceedings under section 73 or 74 of the CGST Act on the scrutiny functionality on ACES-GST application.
5.9 However, if the proper officer is of the opinion that the matter needs to be pursued further through audit or investigation to determine the correct liability of the said registered person, then
he
may take the approval
of
the jurisdictional Principal Commissioner / Commissioner through the divisional Assistant/ Deputy Commissioner, through e-file
or other
suitable mode,
for
referring the matter to the Audit Commissionerate or anti-evasion wing of the Commissionerate,
as
the case may be.The copy of the said approval needs to be uploaded while referring the matter
to the concerned formation through the scrutiny functionality, as per the procedure detailed in the
user manual issued by DG Systems.
6. Timelines for scrutiny of returns:
6.1 Scrutiny of
returns is to be conducted in a time bound manner, so that the cases may be
taken to their
logical conclusion and that
too
expeditiously.
In this regard, the following timelines may be observed by all concerned:
|
S. no. |
Process/Event |
Timeline/ Frequency |
|
(i) |
Communication of GSTINs
selected for scrutiny by DGARM
on
ACES GST Application for a financial year |
From time to time. |
|
(ii) |
Finalization of scrutiny schedule with the approval of the
concerned Assistant/ Deputy Commissioner |
Within seven working days of receipt of the details of the concerned GSTINs on ACES-
GST application |
|
(iii) |
Issuance of notice by the proper officer for intimating discrepancies in FORM GST ASMT-10,
where required |
Within the month,
as mentioned in scrutiny schedule for scrutiny for the said GSTIN. |
|
(iv) |
Reply by the registered person in FORM
GST ASMT-11 |
Within a
period of
thirty
days of
being informed by the proper officer in FORM GST
ASMT-10 or such further period as may be permitted by the proper officer |
|
(v) |
Issuance of order in FORM GST ASMT- 12 for acceptance of reply furnished by the registered person, where applicable |
Within thirty days from receipt of reply from the registered person in FORM GST ASMT- 11 |
|
(vi) |
Initiation of appropriate action
for determination of the tax and other
dues under section 73 or section
74, in cases where no reply is furnished by the registered person |
Within
a period of fifteen days
after completion of the period of thirty
days of
issuance of notice in FORM GST ASMT-10
or such further period as permitted by
the
proper officer |
|
(vii) |
Initiation of appropriate action for determination of the tax and other
dues under section 73 or section
74, in cases where reply is furnished by
the registered
person, but the
same is not found
acceptable by the proper officer |
Within thirty days from receipt of reply from the registered person in FORM GST ASMT- 11 |
|
(viii) |
Reference, if any,
to the
Audit Commissionerate or
the anti-evasion wing of
the Commissionerate for action, under section
65 or section
66 or section
67, as the case may be. |
Within thirty days from receipt of reply from the registered person in FORM
GST ASMT- 11 or within a period of forty-five days of
issuance of FORM GST ASMT-10,
in case
no explanation is furnished by the registered person. |
6.2 It may also be ensured that the requisite actions must be init iated well ahead of the time limits as specified in section 73 or section 74 of the CGST Act, as the case may be, in respect of
a return identified for scrutiny for a financial year.
7. Reporting and Monitoring:
7.1 The details of action taken by the proper officer in respect of GSTINs allocated to him for
scrutiny will be available in the form of two MIS reports in the scrutiny dashboard on the ACES- GST application. MIS report ‘Monthly Scrutiny Progress Report’ (in
the format specified in
Annexure-D of Instruction No.02/2022 dated 22.03.2022) displays summary information of
the status of scrutiny of returns for the selected month of a financial year
for the selected
formation. Besides, the GSTIN-wise details of
action taken in respect of
scrutiny of
returns in
respect of allotted GSTINs is made available in the MIS report ‘Scrutiny Register’
(in the
format specified in Annexure-C of Instruction No.02/2022 dated 22.03.2022)
on the scrutiny dashboard.
7.2 In view of this, the requirement of compiling and sending the Monthly
Scrutiny Progress Report by
the CGST zones to DGGST is hereby dispensed with for the Financial Year 2019-20
onwards. However, the CGST zones will continue to send Monthly Scrutiny Progress Reports to DGGST
in respect
of the Financial Years 2017-18 and FY 2018-19 till the completion of scrutiny of returns for these financial years, as per the timelines mentioned in Instruction No.
02/2022- GST dated 22nd March, 2022.
7.3 It is also added that the progress of the scrutiny exercise as per the scrutiny schedule shall
be
monitored by the jurisdictional Principal Commissioner/ Commissioner on regular basis.
8. It is clarified that since the scrutiny functionality has been provided on ACES-GST
application only for the Financial Year 2019-20 onwards, the procedure specified in Instruction
No. 02/2022 dated 22.03.2022 shall continue to be followed for the scrutiny of returns for the
financial years
2017-18 and 2018-19.
9. The online scrutiny functionality on ACES-GST application will further boost the efforts
of
the department to leverage technology and risk-based tools to encourage self-compliance and to conduct scrutiny of returns with minimal interaction with the registered person. All Principal
Chief Commissioners (PCCs)/ Chief Commissioners (CCs) of
CGST
Zones are requested to
closely monitor timely scrutiny of returns of the selected GSTINs within their jurisdictions.
10. Difficulties, if any, in implementation of these instructions may be informed to the Board
Sanjay Mangal
Principal Commissioner (GST)