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GST Automated Return Scrutiny Module

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Last Updated on July 8, 2023 by Kanakkupillai

Introduction

The GST automated return scrutiny module has been introduced by the Central Board of Indirect Tax and Customs (CBIC) to enhance the scrutiny and verification process of GST returns. This module aims to identify any inconsistencies in the field of GST returns by cross-referencing the data provided in the returns with the information available in the GSTIN portal. In case of any discrepancies, the automated return scrutiny module will generate notices and send them to the concerned individuals. This article will provide an overview of the key functions of the GST automated return scrutiny module.

Important Functions

a) Automated Notice Generation: Previously, tax authorities manually issued notices in ASMT-10 to question taxpayers regarding discrepancies in their tax returns. However, with the introduction of the GST automated return scrutiny module, this process has become automated. The module detects any information mismatch in the GST returns filed on the GSTIN portal and generates ASMT-10 notices automatically. These notices are sent directly to the individuals who have filed the mismatching GST returns. By automating this process, the module improves efficiency and ensures that discrepancies are promptly addressed.

b) Taxpayer Response: Upon receiving the ASMT-10 notice generated by the automated return scrutiny module, taxpayers must respond with an ASMT-11 form. This form allows taxpayers to provide a detailed explanation addressing the discrepancies highlighted by the GST authorities. It is crucial for taxpayers to carefully review the notice and provide a comprehensive response within the stipulated timeframe. The response should include relevant supporting documents and clearly explain the inconsistencies identified in the GST returns. A satisfactory response can help taxpayers avoid further action by the GST authorities.

c) Assessment Outcome: Based on the response provided by the taxpayer in the ASMT-11 form, the GST authorities will assess whether the discrepancies in the GST returns have been adequately addressed. If the response satisfies the authorities and clarifies the discrepancies, no further action will be taken. In such cases, the GST authorities will issue an ASMT-12 acknowledgement to the taxpayer, acknowledging the satisfactory resolution of the matter. However, if the response fails to provide a satisfactory explanation or clarification, the GST authorities will initiate additional measures, such as audits and investigations, to delve further into the discrepancies identified. These measures aim to ensure compliance with GST regulations and address potential tax evasion.

d) Efficient Data Analytics: The GST automated return scrutiny module leverages the power of data analytics and technology to streamline the process of identifying mismatched data in GST returns. The module utilizes advanced algorithms and computer-based data analysis techniques to compare the information provided in the GST returns with the data stored in the system. By automating this process, the module significantly reduces the burden of manual inspection previously placed on the GST authorities. Data analytics enables quicker identification of discrepancies and ensures a more efficient and accurate scrutiny process.

Situations That Trigger GST Return Scrutiny

a) Difference between GSTR-1 and GSTR-2:

Discrepancies between the outward supplies and tax liability reported in GSTR-1 and GSTR-2 can lead to tax evasion. Consequently, such differences prompt the scrutiny of GST returns.

b) Absence of HSN Code:

The HSN (Harmonized Structure of Nomenclature) code is a global classification system for goods. If the HSN code is not mentioned in the outward supply details, it can trigger scrutiny of the GST return.

c) Discrepancies in GSTR-2A, GSTR-2B, and GSTR-3B:

Inconsistencies in the value of input tax credit, as reported in GSTR-2A, GSTR-2B, and GSTR-3B, may trigger the scrutiny process.

d) Reverse Charge Mechanism:

When the value of the reverse charge mechanism is less than the input tax credit value mentioned in GSTR-3B, it can lead to scrutiny of the GST return.

e) Tax Liability in GSTR-3B:

To avoid scrutiny, the tax liability reported in GSTR-3B should not be lower than the one mentioned in GSTR-2B.

f) Verification of ITC in GSTR-3B:

The Input Tax Credit (ITC) reported in GSTR-3B can be cross-checked with the details in GSTR-2A and GSTR-2B for verification purposes.

g) Alignment of GSTR-3B and E-Way Bill:

The tax liability declared in GSTR-3B should align with the tax liability mentioned in the corresponding E-way bill.

Conclusion

The GST automated return scrutiny module simplifies the process of verifying GST returns. However, taxpayers must exercise caution and ensure accurate filing of GST returns, particularly regarding outward supplies. This module increases awareness among taxpayers and emphasizes the importance of complying with tax regulations.

Frequently Asked Questions (FAQs):

What is the purpose of the GST automated return scrutiny module?

The GST automated return scrutiny module aims to scrutinize and verify GST returns by cross-referencing the information provided in the returns with the data stored in the GSTIN portal. Its primary purpose is identifying discrepancies or mismatches in the GST returns and taking appropriate action.

How does the automated return scrutiny module generate notices?

The automated return scrutiny module generates notices in ASMT-10 when it detects any information mismatch in the filed GST returns. These notices are automatically sent to those who have filed mismatching returns.

What should taxpayers do upon receiving an ASMT-10 notice?

Upon receiving an ASMT-10 notice, taxpayers must respond with an ASMT-11 form. This form allows them to provide a detailed explanation addressing the discrepancies highlighted in the notice. It is essential for taxpayers to respond within the given timeframe and include supporting documents to support their explanation.

What happens if the response provided by the taxpayer is satisfactory?

If the response provided by the taxpayer in the ASMT-11 form satisfies the GST authorities and addresses the discrepancies, no further action will be taken. In such cases, the taxpayer will receive an ASMT-12 acknowledgement, acknowledging the resolution of the matter.

What happens if the response provided by the taxpayer is unsatisfactory?

If the response provided by the taxpayer fails to provide a satisfactory explanation or clarification, the GST authorities will initiate further measures. This may include conducting audits and investigations to investigate the discrepancies identified in the GST returns.

How does the automated return scrutiny module utilize data analytics?

The automated return scrutiny module leverages data analytics and technology to streamline verification. By utilizing advanced algorithms and computer-based data analysis techniques, the module compares the information provided in the GST returns with the data stored in the system. This automated process significantly reduces the time and effort required for manual inspection.

What are some situations that can lead to scrutiny of GST returns?

Several situations can trigger the scrutiny of GST returns, including discrepancies between GSTR-1 and GSTR-2, absence of HSN codes in outward supplies, differences in GSTR-2A, GSTR-2B, and GSTR-3B values, reverse charge mechanism issues, inconsistencies in tax liabilities mentioned in GSTR-3B and GSTR-2B, and the verification of input tax credit through GSTR-2A and GSTR-2B.

How does the GST automated return scrutiny module emphasize compliance?

The GST automated return scrutiny module reminds taxpayers to comply with the correct details while filing GST returns. It increases awareness among taxpayers and emphasizes the importance of accurate and timely filing to avoid discrepancies and potential scrutiny.

G.Durghasree B.A.B.L (Hons)

G Durghasree B.A.B.L (Hons) is a registered trademark attorney with extensive experience as an Advocate for a period of 8 years. She possesses expertise in trademark law, including trademark filing and trademark hearings. Additionally, she is skilled in contract drafting and reviewing, providing legal advice and opinions, particularly in the areas of Company Law, Insolvency and Bankruptcy Code (IBC), and Goods and Service Tax Law (GST). Her experience encompasses both litigation and non-litigation aspects of these laws.