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ASMT-10 notice due to TCS vs GSTR-3B mismatch for export of services under LUT – clarification needed
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....SMT-10 notice due to TCS vs GSTR-3B mismatch for export of services under LUT – clarification needed<br> Query (Issue) Started By: - Jatin Mandani Dated:- 5-1-2026 Last Reply Date:- 16-6-2026 Goods and Services Tax - GST<br>Got 10 Replies<br>GST<br>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 exp....
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....ort 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,....
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.... 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: • Is this a common issue due to TCS reporting vs zero-rated exports under LUT? • Is it sufficient to reply expl....
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....aining the nature of business, export of services, and LUT compliance, or is any tax payment required at the ASMT-10 stage? • 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. Reply By Sadanand Bulbule: The Reply: This type of notice is quite comm....
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....on when sales happen through e-commerce platforms. In simple terms, you should explain that the platform has shown your total sales, but in your GST return you pay tax only on taxable Indian sales, while most of your income is from export of services which is tax-free under GST due to LUT. Once this is clearly explained, such notices are usually closed and no tax payment is required at this stage.....
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.... Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, You have to reply to the notice explaining the details of transactions, along with the turnover declared in the returns and the books of accounts. You are not required to pay any additional taxes. Reply By KASTURI SETHI: The Reply: Dear Querist, Whether it is export or domestic sale correct transactio....
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....n value has to be declared in the returns. TCS has to be included in transaction value for the purpose of payment of GST. GST has to be paid on TCS. The issuance of ASMT-10 is an opportunity to defend yourself before the issuance of an SCN. I support the views of both experts in toto. Reply By KASTURI SETHI: The Reply: An illustration: If invoice amount is Rs. 500/- and TCS ....
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....is Rs. 10/- GST has to be paid on Rs. 500/- and NOT on Rs.490/- (500-10). That may be one of the reasons for mismatch. Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: For format of reply please use Form ASMT-11. As this is a scrutiny notice u/s. 61 usually the department will not ask any documentary evidence. Appropriate explanation in ASMT-11 should elicit a satisfactio....
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....n from jurisdictional Suptt in Form ASMT-12. Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, I do agree with the illustration of Sri Kasturi Sethi ji . GST is required to be discharged on the entire taxable value, though there was either TCS or TDS. Reply By Ryan Vaz: The Reply: Yes, this is a very common issue where officers mechanically compare TCS turnover (g....
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....ross value) with Table 3.1(a) taxable turnover in GSTR-3B, without adjusting for zero-rated export of services reported under LUT. At the ASMT-10 stage, no tax payment is required if the mismatch is only due to classification and reporting differences. A properly drafted ASMT-11 reply explaining exports, LUT, and reconciliation is generally sufficient to close the matter. Reply ....
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....By KASTURI SETHI: The Reply: Regarding ASMT-11 also refer to serial No.13 of Issue ID 120584. Reply By Shilpi Jain: The Reply: You can reply with the reasons for the difference noted in the ASMT-10. Also provide some proofs that the supplies made by you are exports and not liable. Id....
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....eally the e-com should not do TCS if you are doing exports as they are not liable to GST. Reply By Tax Garden: The Reply: This is a classic TCS vs zero-rated export reconciliation issue that triggers ASMT-10 scrutiny. The department compares e-commerce TCS data in your GSTR-2B against taxable turnover in GSTR-3B. LUT-backed export of services goes into Table 3.1(b) with 0 tax, not Table 3.....
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....1(a) as a taxable supply. The officer has likely not reconciled this distinction. For your ASMT-11 reply, include: 1. Valid LUT for the period (copy of the filed LUT on GST portal) 2. Reconciliation: TCS gross value in GSTR-2B = zero-rated exports (Table 3.1b) + any taxable supplies (Table 3.1a) 3. Month-wise GSTR-3B showing Table 3.1(b) entries with nil tax ....
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....4. Bank remittance or FIRC / BRC to prove foreign exchange receipt for services exports Also check if the e-commerce operator deducted TCS on cancelled orders or refunds. Those reduce your net zero-rated export figure and can create a gap even when the underlying reporting is correct. This [ASMT-10 notice response guide](https://taxgarden.in/blog/gst-asmt-10-notice-how-to-respond) covers the....
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.... ASMT-11 format, documentation checklist, and common mistakes in the reply.<br> Discussion Forum - Knowledge Sharing ....