ASMT-10 notice due to TCS vs GSTR-3B mismatch for export of services under LUT – clarification needed

[Jatin Mandani]

I have received a notice in Form GST ASMT-10 for FY 2024–25 due to discrepancies noticed during scrutiny of GSTR-3B.

I am engaged in providing export of services to overseas clients through an international e-commerce marketplace. The supplies qualify as zero-rated export of services, and a valid LUT for the relevant financial year has been filed and approved.

The issue appears to be that:

• The e-commerce operator has reported TCS turnover in GSTR-2A/2B, and

• My taxable turnover in GSTR-3B is much lower, as most supplies are zero-rated exports reported separately, with only minor domestic taxable supplies.

The notice seems to have compared TCS turnover with taxable turnover and calculated tax accordingly, asking for an explanation.

My questions are:

1. Is this a common issue due to TCS reporting vs zero-rated exports under LUT?

2. Is it sufficient to reply explaining the nature of business, export of services, and LUT compliance, or is any tax payment required at the ASMT-10 stage?

3. What key points should ideally be covered in the reply to avoid escalation?

Any guidance from professionals or those who have faced similar ASMT-10 scrutiny would be appreciated.

AI Summary

Zero-rated export of services under LUT may explain TCS and GSTR-3B mismatch in ASMT-10 scrutiny.
A scrutiny notice in Form GST ASMT-10 may arise where e-commerce TCS data in GSTR-2A/2B is compared mechanically with taxable turnover in GSTR-3B, creating a mismatch when the taxpayer mainly supplies zero-rated export of services under a valid LUT. The suggested reply is to explain the business model, file a reconciliation of TCS and return figures, and support export status with LUT, bank remittance, and related records. The discussion states that no additional tax payment is required at the ASMT-10 stage if the difference is only due to export reporting and classification.