TaxTMI 
TaxTMI 
Standard Operating Procedure (SOP) for Scrutiny of returns for FY 2017-18 and 2018-19
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....ST application, as an interim measure, the following Standard Operating Procedure (SOP) is being issued 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 161/17 27/04/2022 2.1 Section 61 of the DGST Act, read with rule 99 of the DGST 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 discrep....
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....along with quantification of the amount of tax, interest and any other amount payable in relation to such discrepancy and seeking his explanation thereto. (d) Where the registered person accepts the 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 DGST Act. Page 2 of 13 K 3. Ref. Instruction No. 02/2022-GST dated 22.03.2022 3.1 Selection of returns for scrutiny 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 ....
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....rify 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, GSTN, E-Way Bill Portal etc. may be relied upon for this purpose. Page 3 of 13 5.2 Ref. Instruction No. 02/2022-GST dated 22.03.2022 For convenience of proper officers, an indicative list of parameters to be verified is enclosed a 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 s/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/her 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 FO....
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.... audit or investigation to determine the correct liability of the said registered person, then s/he may refer the matter to the jurisdictional zonal in-charge for the decision whether the matter needs to be referred to Anti-evasion-I Wing of this department, as the case may be. Page 4 of 13 7. 7.1 Timelines for scrutiny returns Ref. Instruction No. 02/2022-GST dated 22.03.2022 Scrutiny of returns is conducted in 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 I) Timeline/Frequency From time to time II) III) IV) ડ V) VI) VII) VIII) IX) Process/Event Communication of list of GSTINs selected for scrutiny (by DGARM to the nodal officer of Trade & Taxes) Distribution of the list of GSTINs selected for scrutiny by the nodal officer to the proper officers concerned Finalization of scrutiny schedule with the approval of the concerned Zonal In-charge Sharing the scrutiny schedule by the proper officer Issuance of notice by the proper officer for intimati....
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....tiny 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 zonal In-charge 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 and forwarded to the concerned zonal-in-charge by 10th day of the succeeding month. The monthly Scrutiny Progress Report for each zone shall be compiled for each month and forwarded to the Commissioner, State Tax by the zonal-In-Charge of the concerned zone by 20th day of the succeeding month. 9. Till the time scrutiny module is made available on the GST portal, the aforesaid interim procedure for scrutiny of returns may be conducted on manual basis. Any communication with the taxpayers for the purpose of scrutiny shall be made as per provisions of DGST Act, 2017. 10. All zonal In-charges are requested to closely monitor timely scrutiny of returns of the identified GSTINS within their jurisdictions. 11. Difficulties, if ....
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....llowing: (i) ITC availed in Table 4(A)(2) and Table 4(A)(3) of FORM GSTR-38. 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 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....
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....t 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 DGST Act mandates deduction of tax at source in respect of supplies made to TDS deductors. Similarly, section 52 of the DGST 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. Page 9 of 13 Ref. Instruction No. 02/2022-GST dated 22.03.2022 46. Liability on account of outward supplies in Table 3.1(a) and 3.1(b) of FORM GSTR-3B should be ....
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....no ITC shall be availed in the return. Sub-section (4) of section 16 of DGST 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 the FORM GSTR-1 till the due date of furnishing of FORM GSTR-1 for the month of March, 2019. Page 10 of 13 Ref. Instruction No. 02/2022-GST dated 22.03.2022 410. ITC availed in respect of "Import of goods" in Table 4(A)(1) of FORM GSTR-3B may be verified with corresponding de....