• Notification Date: 05-06-2023
• Notification No: N/A

CBIC Issues SoPs for Scrutiny of GST Returns, DGARM to Identify Cases from FY'20 Onwards

The Central Board of Excise and Customs (CBIC) has come out with a standard operating procedure for scrutiny of GST returns for fiscal 2019-20 onwards. 

CBIC has informed through a circular that the Directorate General of Analytics and Risk Management (DGARM) will identify returns for scrutiny depending on various risk parameters. Earlier this month, the Central Board of Indirect Taxes and Customs had also rolled out a module for automated scrutiny of GST returns. 

“It is to inform that DG Systems has developed functionality ‘Scrutiny of Returns’, containing the online workflow for scrutiny of returns in the CBIC ACES-GST application. Advisory No. 22/2023- Returns dated 16.05.2023 has also been issued by DG Systems in this regard, along with a User Manual providing for the detailed workflow of the said functionality. The GSTINs selected for scrutiny for the Financial Year 2019-20 have also been made available on the scrutiny dashboard of the proper officers on ACES-GST application,” the CBIC circular noted. 

Sharad Kohli, a tax expert and Founder & Chairman — KCC Group, said that the SOP is a push towards consistency in scrutiny of returns filed by taxpayers. “In the past few years, GST frauds have been on a rise. The finance ministry now wants the methodology to go behind such frauds to be tech savvy and robust," he says. 

"Effectively, GST ASMT-10 is a scrutiny notice that the tax officer would send to an assessee. Then the notice may reply via ASMT -11. Now four such cases will have to be picked by GST officials every month. This will reduce the turnaround time for action on GST frauds,” Kohli adds. 

According to the circular, DGARM will select returns for scrutiny based on various risk parameters. DGARM will select the GSTINs registered with the Central Tax authorities, and the details of the GSTINs will be made available on the ACES-GST application. 

DGARM will select the GSTINs registered with the tax authorities, and the details of the GSTINs will be made available on the scrutiny dashboard of the concerned Central Tax officer on the ACES-GST application. The functionality, according to CBIC, provides for the detailed workflow for communication of discrepancies noticed by tax officers. 

"The details of the risk parameters, in respect of which risk has been identified for a particular GSTIN, and the amount of tax/discrepancy involved in respect of the concerned risk parameters (i.e. likely revenue implication), will also be shown on the scrutiny dashboard of the proper officer for their convenience,” the SoP said. 

According to the SOP, GST ASMT-10, a scrutiny notice that the tax officer would send to an assessee, will be generated if there is a query regarding the returns of any company. On receipt of the notice, the registered person may accept the discrepancy mentioned in the said notice, and pay the tax, interest and any other amount arising from such discrepancy. 

"For businesses, it is now essential to keep all reconciliations and records ready for scrutiny as the time window provided would be limited. A state of readiness for the GST scrutiny would also ensure that businesses can respond with appropriate reasons for the differences mentioned in the scrutiny notice GST - ASMT 10," says MS Mani, Partner, Deloitte India. 

The company may also furnish an explanation for the discrepancy in Form GST ASMT-11, through the common portal, to the proper officer within the specified span of 30 days, the SoP added.