The Classic Partners LLP

Scrutiny of GST Returns

Expert representation for taxpayers facing scrutiny of GST returns under Section 61 of the CGST Act. From ASMT-10 notices to ASMT-11 replies and ASMT-12 closure, our Chartered Accountants prepare detailed reconciliations and defend your GST positions to bring scrutiny proceedings to a clean, demand-free conclusion.

Reply to GST Scrutiny Notice

What is Scrutiny of GST Returns?

Scrutiny of returns is governed by Section 61 of the CGST Act read with Rule 99 of the CGST Rules. The proper officer scrutinises GST returns and related particulars filed by a registered person to verify their correctness. If any discrepancies are noticed, a notice in Form ASMT-10 is issued, informing the taxpayer of the discrepancy and seeking an explanation.

The taxpayer is required to respond in Form ASMT-11 within 30 days (or such further period as may be permitted) by either accepting the discrepancy and paying the differential tax along with interest, or by explaining why the alleged discrepancy is not warranted. Where the explanation is found acceptable, the officer informs the taxpayer in Form ASMT-12 and closes the proceedings.

Common Discrepancies Flagged in ASMT-10

Mismatch between turnover in GSTR-1 and GSTR-3B for one or more periods.
Excess ITC availed in GSTR-3B as compared to GSTR-2A / GSTR-2B.
Differences between turnover in GST returns and TDS / TCS data, Income Tax returns, or MCA filings.
Mismatch between e-way bills generated and outward supplies reported.
Differences between exports reported and shipping bill / ICEGATE data.
Reverse charge liability not discharged on notified supplies.

Our GST Scrutiny Defence Services

ASMT-10 Analysis

Detailed analysis of each discrepancy listed in the notice and risk-based prioritisation.

Reconciliation Working

GSTR-1 vs GSTR-3B, ITC reconciliation, and books reconciliation supporting the response.

ASMT-11 Reply Drafting

Legally-sound replies with supporting evidence and references to circulars and case law.

Voluntary DRC-03 Payment

Where genuine short payment exists, voluntary payment of tax with interest before SCN escalation.

Personal Hearing Support

Representation before the proper officer for clarifications and additional submissions.

SCN & Appeal Continuity

Where scrutiny escalates to SCN under Section 73/74, seamless transition with the same team.

Scrutiny Procedure under Section 61

Step 1 — Selection: returns are selected based on risk parameters by the GSTN Business Intelligence and Fraud Analytics (BIFA) system.
Step 2 — ASMT-10 notice: communication of discrepancies with quantified differential tax, interest, and any other amounts.
Step 3 — Taxpayer reply (ASMT-11): filed within 30 days from notice, accepting or contesting each discrepancy.
Step 4 — Closure (ASMT-12): where the explanation is found acceptable, the proceedings are closed.
Step 5 — Escalation: where the explanation is not acceptable, the officer may proceed under Section 65 (audit), Section 66 (special audit), Section 67 (inspection / search), or directly under Section 73 / 74 (demand).

Documents Required for Scrutiny Defence

Copy of ASMT-10 notice with all annexures and quantified discrepancy.
Filed GSTR-1, GSTR-3B, GSTR-9, and GSTR-9C for the period under scrutiny.
Reconciliation of GST returns with audited financials.
GSTR-2A and GSTR-2B reconciliation working papers.
Tax invoices, e-way bills, shipping bills, FIRC, and other supporting documents.
Earlier correspondence, audit reports, or scrutiny notices for the same period.

Why Choose The Classic Partners

Scrutiny-defence specialists with deep experience in central and state GST jurisdictions.
Documentation-first approach — every reply is backed by working papers ready for review.
End-to-end continuity — same team continues through adjudication and appeals if needed.
Cost-effective resolution — closure at scrutiny stage avoids longer SCN and appeal cycles.

Frequently Asked Questions

What is the time limit to reply to an ASMT-10 notice?

The taxpayer must reply in Form ASMT-11 within 30 days from the date of issuance of ASMT-10, or such further period as may be permitted by the proper officer.

What happens if I do not reply to the scrutiny notice?

If no satisfactory explanation is furnished, or if the discrepancy is not rectified, the proper officer may initiate further action under Section 65 (audit), Section 66 (special audit), Section 67 (inspection / search), or proceed directly to Section 73 / 74 (demand) by issuing a Show Cause Notice.

Is scrutiny the same as audit?

No. Scrutiny under Section 61 is a desk-based review of returns and related information, primarily to verify correctness. Audit under Section 65 is a more comprehensive examination conducted by tax officers at the place of business. See GST Audit & Assessment Support for more.

Can scrutiny be conducted for multiple years together?

Yes. Scrutiny is typically initiated for a particular financial year or set of tax periods. A single ASMT-10 notice may, however, cover multiple periods within the prescribed limitation under Section 73 / 74.

If I accept the discrepancy, can I avoid penalty?

Yes. If you pay the tax along with interest before issuance of the SCN, no penalty is leviable under Section 73(5) (non-fraud cases). Voluntary payment is made through Form DRC-03 and reported in the ASMT-11 reply.

How does scrutiny escalate into a Show Cause Notice?

If the taxpayer's reply is not accepted, the officer proceeds under Section 73 (non-fraud) or Section 74 (fraud) by issuing a Show Cause Notice in Form DRC-01. Our Demand & SCN Handling team takes over at that stage.

Close Scrutiny Without Demand

Get expert reconciliation, drafting, and representation for every ASMT-10 notice.