SOP for Scrutiny of returns for FY 2017-18 and 2018-19

S. No

Process

Timeline

1

Issuance of notice by the proper officer for intimating discrepancies in FORM GST ASMT-10

Within the month, as mentioned in scrutiny schedule for scrutiny of the returns of the said GSTIN

2

Reply by the registered person in FORM GST ASMT-11

Within a period of thirty days of being informed

by the proper officer in FORM GST ASMT-10 or

such further period as may be permitted

3

Issuance of order in FORM GST ASMT-12 for acceptance of reply furnished by the registered person, where applicable

Within thirty days from receipt of reply from the registered person in FORM GST ASMT-11

4

Initiation of appropriate action for determination of the tax and other dues u/s 73 or 74, in cases where no reply is furnished by the registered person

Within a period of fifteen days after completion of the period of thirty days of issuance of notice in FORM GST ASMT-10 or such further period as permitted by the proper officer

5

Initiation of appropriate action for determination of the tax and other dues u/s 73 or 74, in cases where reply is furnished, but the same is not found acceptable by the proper officer

Within thirty days from receipt of reply from the registered person in FORM GST ASMT-11

6

Reference, if any, to the Commissioner for decision regarding appropriate action u/s 65 or 66 or 67

Within 30 days from receipt of reply in FORM GST ASMT-11 or within a period of 45 days of issuance of FORM GST ASMT-10, in case no explanation is furnished

S. No

Nature

Category

Remarks

1

Tax Liability on Outward Supplies

Tax liability on account of “Outward taxable supplies” and “Outward taxable supplies (zero rated)” as declared in FORM GSTR-3B may be verified with corresponding tax liability in respect of outward taxable supplies declared in FORM GSTR-1

Where the tax liability in respect of supplies declared in the aforementioned tables of FORM GSTR-1 exceeds the liability declared in FORM GSTR-3B, it may indicate short payment of tax.

2

Tax Liability on Inward Supplies (RCM)

a. ITC availed in Table 4(A)(2) and Table 4(A)(3) of FORM GSTR-3B

Note – ITC availed cannot exceed Cash paid under RCM

Availment of ITC in excess of the liability discharged on account of reverse charge supplies may indicate either short payment of tax liability on account of RCM supplies or excess availment of input tax credit in respect of RCM supplies

b. ITC in respect of inward supplies attracting reverse charge as per FORM GSTR-2A

Note – RCM paid as per GSTR 3B cannot be less than RCM populated in GSTR 2A

Details of such inward supplies from URD persons are not communicated in FORM GSTR-2A, as only registered persons furnish FORM GSTR-1. Moreover, details of ITC on account of import of services also are not communicated in FORM GSTR-2A. As such, the RCM supplies declared in table 3.1(d) of FORM GSTR-3B cannot be less than the inward supplies attracting RCM as available in FORM GSTR-2A.

c. Tax/Cess paid in cash as per column 8 of Table 6.1 of FORM GSTR-3B

In respect of inward supplies liable to RCM, tax/cess is to be paid in cash.

Besides such RCM payments in cash, there may also be other payments in cash by the registered person. In any case, tax liability off-set in cash should not be less than the liability arising on account of reverse charge as per table 3.1(d) of FORM GSTR-3B.

Where the tax liability off-set in cash is less than the liability arising on account of reverse charge, it may indicate short payment of tax.

3

ITC on Inward Supplies from ISD

ITC availed in respect of “Inward supplies from ISD” in Table 4(A)(4) of FORM GSTR-3B may be verified with Table 7 (along with the net effect of amendments thereof in Table 8) of FORM GSTR- 2A.

Check Table 7 of GSTR 2A

S. No.

Nature

Category

Remarks

4

ITC on All other ITC

ITC availed in respect of “All other ITC” in Table 4(A)(5) of FORM GSTR-3B may be verified with Table 3 and Table 5 (along with the net effect of amendments thereof in Table 4 and Table 6 respectively) of FORM GSTR-2A.

Tables 3 and 5 in FORM GSTR-2A contain details of supplies attracting forward as well as reverse charge. Therefore, only the supplies against which there is “No” or “N” in column 14 of Table 3, column 16 of Table 4, column 15 of Table 5 and column 18 of Table 6 may be considered

5

Outward supply (3B) vs. TDS and TCS Credit

The taxable value declared on account of “Outward taxable supplies FORM GSTR-3B is not less than the net amount liable for TCS and TDS credit as per Column 6 of Table 9 of FORM GSTR-2A.

The details of TDS and TCS are furnished in their FORM GSTR-7 and FORM GSTR-8 respectively and communicated to the registered person in table 9 of FORM GSTR-2A.

However, the taxable value declared on account of “Outward taxable supplies in FORM GSTR-3B cannot be less than the net amount liable for TCS and TDS credit as per FORM GSTR-2A.

A discrepancy on the aforementioned count may indicate short payment of tax

6

Outward supply (3B) vs. Liability as per EWB

Liability on account of outward supplies as per FORM GSTR-3B should be verified with the Tax liability as declared in e-way bills

Taxpayer is required to generate e-way bill before commencement of movement of goods of consignment value exceeding fifty thousand rupees. E-way bills capture a part of supplies made by the registered person. However, in FORM GSTR-3B, the registered person is required to declare details of all outward supplies. Accordingly, liability declared in FORM GSTR-3B should not be less than tax liability as declared in the e-way bills

7

ITC from suppliers whose registration is cancelled

Claim of ITC in respect of supplies from taxpayers whose registrations have been cancelled retrospectively

In case of retrospective cancellation of registration of a supplier, the recipient is not entitled to claim ITC in respect of invoices or debit notes issued after the effective date of cancellation of the registration. Effective date of cancellation of registrations of the suppliers, if any, is made available in relevant tables of FORM GSTR-2A.

Accordingly, it may be verified whether the registered person has availed ITC in respect of such invoices or debit notes issued by the suppliers after the effective date of cancellation of their registrations

S. No

Nature

Category

Remarks

8

ITC on filing of GSTR 1 but non filing of GSTR 3B

Ineligible ITC availed in respect of invoices / debit notes issued by the suppliers who have not filed their GSTR-3B returns for the relevant tax period

In case where GSTR 3B is not filed, GSTR 2A shall contain status as “No”, which indicates the supplier has furnished invoice details in his FORM GSTR-1, but has not furnished the return in FORM GSTR-3B for the corresponding tax period. The availment of ITC in respect of such invoices /debit notes may be checked.

9

ITC on returns filed post due date for filing of GST Returns

Whether GSTR-3B of a tax period is filed after the last date of availment of ITC in respect of any invoice / debit note as per section 16(4). In such cases, no ITC shall be availed in the return.

Sec 16(4) of CGST Act provides for availment of ITC only till the due date of furnishing of FORM GSTR-3B for the month of September following the end of FY to which such ITC pertains or furnishing of relevant Annual Return, whichever is earlier. Accordingly, if any return in FORM GSTR-3B is furnished after such time by the registered person under scrutiny, any ITC availed therein is inadmissible.

for FY 2017-18, availment of ITC was allowed till the due date of furnishing of the return in FORM GSTR-3B for the month of March, 2019

10

ITC on Import of Goods

ITC availed in respect of “Import of goods” in FORM GSTR-3B may be verified with corresponding details in FORM GSTR-2A.

The details of such imports may also be cross-verified from ICEGATE portal. Bill of Entry details appear on ICEGATE postal as well.

11

Reversal of ITC as per Rule 42 and 43 (Common Credit)

reversals of ITC in accordance with provisions of rule 42 and rule 43 of the CGST Rules

The registered person avails ITC in table 4(A) of FORM GSTR-3B and reverses in Table 4(B). It may be verified whether requisite reversals have actually been made by the said registered person

12

Payment of Interest as per Sec 50

Whether the registered person has paid interest liability in terms of section 50

As per section 50 of the CGST Act a registered person is required to pay interest on delayed payment of tax. It may be verified whether interest payable as per the provisions of section 50 of the CGST Act has actually been paid by the registered person. Interest at the rate of 18% is applicable on tax paid in cash only and not on gross liability.

13

Payment of Late Fees as per Sec 47

Whether the registered person has paid late fee in terms of section 47 in respect of returns/statements

As per section 47 of the CGST Act a registered person is required to pay late fee for delayed filing of returns / statements under the Act. It may be verified whether late fee payable as per the provisions of section 47 of the CGST Act has actually been paid by the registered person