Simplified Standard Operating Procedure (SOP) for GST Return Scrutiny: A Comprehensive Guide

The Directorate General of Systems has introduced a user-friendly Scrutiny Module on the CBIC ACES-GST application, streamlining the scrutiny process for GST returns from FY 2019-20 onwards. This latest Standard Operating Procedure (SOP), implemented on May 26, 2023, offers a detailed workflow for effective compliance with Section 61 read with Rule 99 of the GST Act. In this guide, we simplify the SOP to provide businesses with a clear understanding of the selection, preparation, and response process for GST return scrutiny.

Selection of Returns for Scrutiny and Communication:

1. The Directorate General of Analytics and Risk Management (DGARM) identifies risk parameters and selects GSTINs for scrutiny.
2. DGARM provides selected GSTINs and risk parameters to the proper officer through the scrutiny dashboard on the ACES-GST application.
3. The proper officer finalizes a scrutiny schedule, prioritizing riskier GSTINs with higher revenue implications, under the approval of divisional Assistant/Deputy Commissioner.

Preparation of Scrutiny Schedule:

1. The proper officer schedules month-wise scrutiny for selected GSTINs, aiming to scrutinize a minimum of 4 GSTINs per month.
2. Principal Commissioner/Commissioner monitors and ensures adherence to the scrutiny schedule.

Process of Scrutiny by the Proper Officer:

1. The Proper Officer verifies returns and related particulars by relying on system information and data from various sources.
2. Details of risk parameters and discrepancies are provided on the scrutiny dashboard, along with likely revenue implications.
3. Minimal interaction is maintained between the Proper Officer and the registered person, with additional document requests avoided before issuing FORM GST ASMT-10.
4. The Proper Officer issues FORM GST ASMT-10 through the scrutiny functionality on ACES-GST application, communicating discrepancies and requesting explanations.
5. Notices are sent to registered persons via the common portal, specifying parameter-wise details of discrepancies and uploading supporting documents.
6. All returns for the corresponding financial year are scrutinized for each selected GSTIN, and compiled notices are issued.
7. Registered persons can accept discrepancies and make payments or provide explanations (FORM GST ASMT-11) within the prescribed period.
8. Responses in FORM GST ASMT-11 are made available to the Proper Officer on the scrutiny dashboard. Acceptable explanations or payments conclude proceedings through FORM GST ASMT-12.
9. Unsatisfactory responses or non-payment may lead to proceedings under section 73 or section 74 of the CGST Act, adhering to specified monetary limits.
10. Further audit or investigation may be initiated with approval from jurisdictional Principal Commissioner/Commissioner.

Response from Registered Person:

1. Registered persons receive notices in FORM GST ASMT-10 on the common portal and can accept discrepancies or provide explanations.
2. Acceptance of discrepancies can be accompanied by payments through FORM DRC-03.
3. Explanations or responses in FORM GST ASMT-11 are furnished within the prescribed period.

Conclusion of Proceedings:

1. The Proper Officer reviews responses in FORM GST ASMT-11 and concludes proceedings through FORM GST ASMT-12 if acceptable.
2. Unsatisfactory responses may lead to proceedings under section 73 or section 74 of the CGST Act, following specified monetary limits.
3. Further audit or investigation requires approval from jurisdictional Principal Commissioner/Commissioner.

Timelines for Scrutiny of Returns:

1. Start Date: Communication of GSTINs by DGARM.
2. Start Date + 7 days: Finalization of scrutiny schedule.
3. Start Date + Notice Month*: Issuance of FORM GST ASMT-10.
4. Start Date + Notice Month + 30 days (+ Further time as allowed by Proper Officer): Reply by the registered person in FORM GST ASMT-11.
5. Start Date + Notice Month + 30 days + 30 days: Conclusion of proceedings or initiation of further actions as applicable.

Understanding the simplified SOP for GST return scrutiny is essential for businesses to ensure compliance and respond effectively to notices. By following the outlined process and timelines, businesses can navigate the scrutiny process with clarity and transparency, minimizing potential risks and penalties. For expert guidance and assistance in GST compliance, consult with professionals to streamline your operations and maximize benefits in the GST regime.

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