What Can Lead To Scrutiny Of Your GST Return?
Every GST-registered entity is required to file their GST return which is true and correct to facts with no misrepresentations. In case the GST department notices any sort of discrepancy in the filed returns, it may lead to the scrutiny of the returns which may lead to further action by the tax authorities after giving a proper opportunity of being heard to the taxpayer.
What is the scrutiny of GST return?
As per the provisions of section 61 of the Central Goods and Service Tax Act, 2017, the proper officer is empowered to scrutinize a return and the related particulars furnished by the registered person in order to verify the correctness of the return and to inform him of the discrepancies noticed, if any, and seek his explanation thereto.
When the explanation provided by the registered person is found sufficient and appropriate, no further action is taken by the department ahead. Provided that, in case the explanation provided by the registered person is not found satisfactory or in case no such explanation is received by the department within a prescribed time period of thirty days or such other further period as may be permitted or if the registered person doesn’t take the corrective action as directed by the proper officer within the prescribed time period, to resolve the discrepancy, then the proper officer is empowered to take appropriate action under the provisions of section 66,67,73 or 74as he may deem appropriate.
Provided that, the government has issued a standard operating procedure(SOP) in order to distinguish the methodology, process, and procedure of scrutiny of GST returns. Various parameters and circumstances have been mentioned in the SOP which may lead to the scrutiny of the GST returns.
Parameters for scrutiny of the GST return:
- If there is a mismatch in the tax liability on account of “Outward taxable supplies (other than zero rated, nil rated and exempted)” and “Outward taxable supplies (zero rated)” as declared in FORM GSTR-3B with corresponding tax liability in respect of outward taxable supplies declared in FORM GSTR-1;
- If there is a mismatch in tax liability on account of “Inward supplies (liable to reverse charge)” as declared in FORM GSTR-3B with:
-ITC availed in FORM GSTR-3B,
-ITC in respect of inward supplies attracting reverse charge as available in FORM GSTR-2A and Tax/Cess paid in cash in FORM GSTR-3B;
- If there is a mismatch in Input Tax Credit availed in respect of the inward supplies from the input service distributor as mentioned in form GSTR-3B with form GSTR-2A.
- If there is a mismatch in ITC availed in respect of all other ITC of GSTR-3B with GSTR-2A.
- If there is a mismatch in the taxable value declared on account of Outward taxable supplies (other than zero rated, nil rated and exempted)” in FORM GSTR-3B with net amount liable for TCS and TDS credit as per GSTR-2A;
- If there is a mismatch in the liability on account of outward supplies in form GSTR-3B with the tax liability as declared in the e-way bills.
- In the cases of claims of ITC in respect of the supplies from the taxpayers whose registrations have been cancelled.
- In the cases of the ineligible ITC availed in respect of invoices/debit notes issued by the suppliers who have not filed their GSTR-3B returns for the relevant tax period.
- In the cases where the form GSTR-3B of a tax period is filed after the availing of ITC in respect of any invoice/debit note as per section 16(4).
- If there is a mismatch in ITC availed in respect of “Import of goods” in FORM GSTR-3B with corresponding details in FORM GSTR-2A;
- In the cases where the registered person has made reversals of ITC in accordance with provisions of rule 42 and rule 43 of the CGST Rules.
- In the cases where the registered person has paid interest liability in terms of section 50.
- In the cases where a registered person has paid late a fee in terms of section 47 in respect of returns/statements.
The aforementioned circumstances may lead to the scrutiny of the GST return, hence everything shall be kept in mind and the returns shall be filed disclosing true and correct facts. The act empowers the proper officer to scrutinize the return and issue a notice in Form GST ASMT-10 seeking an explanation from the registered person in respect of the discrepancy noticed in the duly prescribed format in Form GST ASMT-11. In case the explanation furnished by the registered person is found to be acceptable, the proper officer shall inform him accordingly in FORM GST ASMT-12 and no further action is taken.
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