TMI BlogStandard Operating Procedure (SOP) for Scrutiny of returns for FY 2017-18 and 2018-19X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the following Standard Operating Procedure (SOP) is being issued by the Board in order to ensure uniformity in selection/ identification of returns for scrutiny, methodology of scrutiny of such returns and other related procedures. 2. Relevant statutory provisions 2.1 Section 61 of the CGST Act , read with rule 99 of the CGST Rules , provides for scrutiny of returns. The same are reproduced below for reference: Section 61. Scrutiny of returns: (1) The proper officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner as may be prescribed and seek his explanation thereto. (2) In case the explanation is found acceptable, the registered person shall be informed accordingly and no further action shall be taken in this regard. (3) In case no satisfactory explanation is furnished 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 take the corrective measure in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other amount arising from such discrepancy or where the explanation furnished by the registered person is found acceptable, conclude the proceedings after informing the registered person. (e) Where no satisfactory explanation is furnished by the registered person or where the registered person, after accepting the discrepancy, fails to pay the tax, interest and any other amount arising from such discrepancy, initiate appropriate action including those under section 65 or section 66 or section 67 , or determination of tax and other dues under section 73 or section 74 of the CGST Act . 3. Selection of returns for scrutiny 3.1 Selection of returns for scrutiny is to be based on specific risk parameters. For this purpose, the Directorate General of Analytics and Risk Management (DGARM) has been assigned the task to select the GSTINs registered with Central tax authorities, whose returns are to be scrutinized, and to communicate the same to the field formations from time to time through the DDM portal (to the nodal officer of the Commissionerate concerned) for further action. 3.2 For convenience of field officers, DGARM would also provide some relevant data (al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon for this purpose. 6.2 For convenience of proper officers, an indicative list of parameters to be verified is enclosed as Annexure B. It may be noted that the said list is only indicative, and not exhaustive. The proper officer may also consider any other parameter, as he may deem fit, for the purpose of scrutiny. 6.3 It may be noted that at this stage, the proper officer is expected to rely upon the information available with him or with the department. As far as possible, scrutiny of returns 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 taxpayers before issuance of FORM GST ASMT-10. 6.4 The proper officer shall issue a notice to the registered person in FORM GST ASMT-10 informing him of the discrepancies noticed and seeking his explanation thereto. 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 may, as far as possible, be specific in nature and not vague or g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to Audit Commissionerate or Anti-evasion Wing of the Commissionerate, as the case may be. 7. Timelines for scrutiny of returns 7.1 Scrutiny of returns is to be conducted in a time bound manner, so that necessary action to safeguard revenue may be taken up expeditiously. In this regard, the following timelines may be observed by all concerned: S. no. Process/Event Timeline/ Frequency (i) Communication of list of GSTINs selected for scrutiny (by DGARM to the nodal officer of the Commissionerate concerned) From time to time. (ii) Distribution of the list of GSTINs selected for scrutiny by the nodal officer to the proper officers concerned. Within three working days of receipt of the list from DGARM. (iii) 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 from the nodal officer. (iv) Sharing the scrutiny ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn identified for scrutiny for a financial year. 8. Reporting and Monitoring A Scrutiny Register shall be maintained by the proper officer in respect of the GSTINs allotted for scrutiny, in the format detailed in Annexure C. The progress of the scrutiny exercise as per the scrutiny schedule shall be monitored by the jurisdictional Principal Commissioner/ Commissioner on monthly basis. Further, a Scrutiny Progress Report, in the format detailed in Annexure D, shall be prepared by the proper officer at the end of every month. The monthly Scrutiny Progress Report for each Commissionerate of the CGST Zone shall be compiled for each month and forwarded to the Director General of Goods and Service Tax (DGGST) by the Principal Chief Commissioner/Chief Commissioner of the concerned Zone by 10th day of the succeeding month. The DGGST, in turn, would present the progress report to the Board, through the GST Policy Wing, by the 20th day of the corresponding month. 9. Till the time scrutiny module is made available on the CBIC-GST application/AIO for CBIC officers, the aforesaid interim procedure for scrutiny of returns may be conducted on manual basis. Any communication with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity for the tax period under consideration, as the tax should have already been paid upon receipt of such advance amount. 2. Tax liability on account of Inward supplies (liable to reverse charge) as declared in Table 3.1(d) of FORM GSTR-3B may be verified with the following: (i) ITC availed in Table 4(A)(2) and Table 4(A)(3) of FORM GSTR-3B. Availment of ITC in excess of the liability discharged on account of reverse charge supplies may indicate either short payment of tax liability on account of RCM supplies or excess availment of input tax credit in respect of RCM supplies. (ii) ITC in respect of inward supplies attracting reverse charge as available in Table 3 and Table 5 (along with the net effect of amendments thereof in Table 4 and Table 6 respectively) of FORM GSTR-2A. In respect of inward supplies attracting reverse charge received from a registered person, the details of corresponding invoices and debit/credit notes are communicated in table 3 and table 5 of FORM GSTR- 2A. Further, in case of amendment of such details by the corresponding supplies in their FORM GSTR-1, the details of such amendments are communicated in table 4 and table 5 respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward taxable supplies (other than zero rated, nil rated and exempted) in Table 3.1(a) of FORM GSTR-3B is not less than the net amount liable for TCS and TDS credit as per Column 6 of Table 9 of FORM GSTR-2A. Section 51 of the CGST Act mandates deduction of tax at source in respect of supplies made to TDS deductors. Similarly, section 52 of the CGST Act requires electronic commerce operators to collect tax at source in respect of supplies made through them. The details of such TDS and TCS are furnished by the corresponding deductors and operators in their FORM GSTR-7 and FORM GSTR-8 respectively and communicated to the registered person in table 9 of FORM GSTR-2A. Besides such supplies, the registered person may have other supplies also. However, the taxable value declared on account of Outward taxable supplies (other than zero rated, nil rated and exempted) in Table 3.1(a) of FORM GSTR-3B cannot be less than the net amount liable for TCS and TDS credit as per Column 6 of Table 9 of FORM GSTR-2A. A discrepancy on the aforementioned count may indicate short payment of tax. 6. Liability on account of outward supplies in Table 3.1(a) and 3.1(b) of FORM GSTR-3B should be veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CGST Act provides for availment of ITC only till the due date of furnishing of FORM GSTR-3B for the month of September following the end of FY to which such ITC pertains or furnishing of relevant Annual Return, whichever is earlier. Accordingly, if any return in FORM GSTR-3B is furnished after such time by the registered person under scrutiny, any ITC availed therein is inadmissible. It may also be noted that vide proviso to sub-section (4) of section 16, for FY 2017-18, availment of ITC was allowed beyond the due date of furnishing of return for the month of September, 2018 till the due date of furnishing of the return in FORM GSTR-3B for the month of March, 2019 subject to the condition that the details of the said invoices / debit notes should have been furnished by the suppliers in their FORM GSTR-1 till the due date of furnishing of FORM GSTR-1 for the month of March, 2019. 10. ITC availed in respect of Import of goods in Table 4(A)(1) of FORM GSTR-3B may be verified with corresponding details in Table 10 and Table 11 of FORM GSTR-2A. Wherever required, the details of such imports may also be cross-verified from ICEGATE portal. 11. Whether the registered p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ASMT-11 received Date of receipt of reply in ASMT- 11 Amount of discrepancy accepted by registered person Amount paid in DRC-03 ARN and date of DRC-03 Whether ASMT-12 has been issued Date of issuance of ASMT-12 10 11 12 13 14 15 16 Action under section 73 or 74 Action under section 65 or 66 or 67 Whether action for determination of the tax and other dues under section 73 or section 74 has been initiated Date of issuance of SCN under section 73 or 74 Amount of demand as per SCN Date of reference, if any, to the Commissioner for decision regarding action under section 65 or section 66 or section 67 Date of acceptance of such reference, if any 17 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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