Section 61 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) read with rule 99 of Central Goods and Services Tax Rules, 2017 (“ CGST Rules”) provides for scrutiny of returns and related particulars furnished by the registered person.
Till the time a Scrutiny Module for online scrutiny of returns is made available on the CBIC-GST application, as an interim measure, CBIC has issued vide Instruction No. 02/2022-GST dated 22nd March, 2022 a Standard Operating Procedure (SOP) in order to ensure uniformity in selection/ identification of returns for scrutiny, methodology of scrutiny of such returns and other related procedures for GST returns for FY 2017-18 and 2018-19.
The instruction states that Section 61 read with Rule 99 suggest that scrutiny of returns, inter-alia, entails the following:
(a) Selection of returns furnished by a registered person for scrutiny, preferably based on robust risk
parameters.
(b) Scrutiny of the returns and related particulars furnished by the registered person to verify the correctness of the return. Information available with the proper officer in various returns and
statements furnished by the registered person and the data/details made available through various
sources like DGARM, ADVAIT, GSTN, E-Way Bill Portal, etc. may be relied upon for this purpose.
(c) Informing the registered person of the discrepancies noticed, if any, along with quantification of the
amount of tax, interest and any other amount payable in relation to such discrepancy and seeking his
explanation thereto.
(d) Where the registered person accepts the discrepancy and pays the tax, interest and any other
amount arising from such discrepancy or where the explanation furnished by the registered person is
found acceptable, conclude the proceedings after informing the registered person.
(e) Where no satisfactory explanation is furnished by the registered person or where the registered
person, after accepting the discrepancy, fails to pay the tax, interest and any other amount arising from
such discrepancy, initiate appropriate action including those under section 65 or section 66 or section
67, or determination of tax and other dues under section 73 or section 74 of the CGST Act.
The Instruction further states that selection of returns for scrutiny is to be based on specific risk parameters. For this purpose, the Directorate General of Analytics and Risk Management (DGARM) has been assigned the task to select the GSTINs registered with Central tax authorities, whose returns are to be scrutinized, and to communicate the same to the field formations from time to time through the DDM portal (to the nodal officer of the Commissionerate concerned) for further action.
Further, as per Instruction, scrutiny of returns of a taxpayer may be conducted by Superintendent of Central Tax in-charge of the jurisdictional range of the said taxpayer. Also he shall conduct scrutiny of returns pertaining to minimum of 3 GSTINs per month. Scrutiny of returns of one GSTIN shall mean scrutiny of all returns pertaining to a financial year for which the said GSTIN has been identified for scrutiny.
The instruction states that the Proper Officer shall scrutinize the returns and related particulars furnished by the registered person to verify the correctness of the returns. Information available with the proper officer on the system in the form of various returns and statements furnished by the registered person and the data/details made available through various sources like DGARM, ADVAIT, GSTN, E-Way Bill Portal, etc. may be relied upon for this purpose.
For the convenience of proper officers, an indicative list of parameters to be verified is enclosed with the Instruction. Further process of scrutiny, timelines of scrutiny of returns, reporting and monitoring mechanism like maintenance of scrutiny register etc is has been elaborated in the Instruction.
The Deptt. officials have been instructed to ensure while conducting scrutiny that the requisite action for issuing notices/orders is taken well ahead of the time limits as prescribed in section 73 or section 74 of the CGST Act, as the case may be, in respect of a return identified for scrutiny for a financial year.
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