TaxTMI 
TaxTMI 
Standard Operating Procedure (SOP) for Scrutiny of returns for FY 2017-18 and 2018-19
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....pplication, as an interim measure, 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 t....
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....he discrepancy and pays the tax, interest and any 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 a....
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....etc. may be relied upon 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 no....
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....erate 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 schedule by the zone with DGGST Within thirty days of receipt of the details of the concerned GSTINs from DGARM. (v) Issuance of notice by the proper officer for intimating discrepancies in FORM GST ASMT-10, where required ....
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....ogress 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 taxpayer for the purpose of scrutiny shall be made with the use of DIN as per the guidelines mentioned in the Circular No. 122/41/2019-GST dated 5th November 2019. 10. This SOP is envisaged to enable 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 persons. All Principal Chief Commissioners (PCCs)/ Chief Commissioners (CCs) are requested to closely monitor timely scrutiny of returns of the identified GSTINs within their jurisdictions. ....
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....-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 respectively. However, the details of such inward supplies from unregistered persons are not communicated in FORM GSTR-2A, as only registered persons furnish FORM GSTR-1. Moreover, details of ITC on account of import of services also are not communicated in FORM GSTR-2A. As such, the reverse charge supplies declared in table 3.1(d) of FORM GSTR-3B cannot be less than the inward supplies attracting reverse charge as available in the above mentioned tables of FORM GSTR-2A. Where the RCM supplies declared in table 3.1(d) of FORM GSTR-3B are less than the inward supplies attracting reverse charge as per details available in FORM GSTR-2A, it may indicate short payment of tax liability on account of RCM supplies. It may be noted that the said tables in FORM GSTR-2A contain details of supplies attrac....
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....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 verified with the Tax liability as declared in e-way bills. Rule 138 of the CGST Rules mandates generation of e-way bill before commencement of movement of goods of consignment value exceeding fifty thousand rupees (in relation to supply, or for reasons other than supply, or due to inward supply from unregistered person). Besides such supplies, the registered person may also have such other supplies which do not require generation of e-way bills, such as supply of services or supplies as specified in sub-rule (14) of rule 138, etc. Therefore, e-way bills capture a part of supplies made by the registered person. However, in table 3.1 of FORM GSTR-3B, the registered person is required to declare details of all outward supplies. Accordingly, liability declared in table 3.1 (a) and (b) of FORM GSTR-3B shou....
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....TR-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 person has made reversals of ITC in accordance with provisions of rule 42 and rule 43 of the CGST Rules. Rule 42 of the CGST Rules provides for manner of determination of input tax credit in respect of inputs or input services and reversal thereof. Rule 43 provides for manner of determination of input tax credit in respect of capital goods and reversal thereof in certain cases. The registered person avails ITC in table 4(A) of FORM GSTR-3B and reverses in Table 4(B). It may be verified whether requisite reversals have actually been made by the said registered person. 12. Whether the registered person has paid interest liability in terms of section 50. As per section 50 of the CGST Act a registered person is required to pay interest on delayed payment of tax. It may be verified whether interest payable....