How to handle ASMT-10 Notices?

After few years from the implementation of GST Act, 2017, most of the businesses are receiving the GST notices from the department citing various reasons viz. mismatch in GSTR-2A vs Input Tax Credit as availed in GSTR-3B, non-filing of Annual Return, differences in liability as declared in Form GSTR-3B vs as appearing in Form GSTR-1.

Mostly, the Proper officer selects the return for scrutiny from the comparison table which is generated on the portal itself which can be accessed on GST portal under Services Tab wherein you will get the option of returns and under which the facility for Tax Liabilities and ITC Comparison is provided. Section 61 of GST Act has empowered GST officer to verify the correctness of returns and the related particulars furnished by the registered persons. After scrutiny of the returns if any discrepancies are noticed then the proper officer shall inform by serving notice in FORM ASMT-10. The registered person shall within a period of 30 days or further extended period as allowed by the CGST officer, shall either accept the discrepancies and pay the tax including interest and penalty or furnish an explanation for the said discrepancies in FORM ASMT 11. Where the explanation in ASMT 11 is found acceptable then the proper officer shall inform the acceptance in ASMT 12 and no further action is required and accordingly the proceeding is dropped. Where the explanation in ASMT 11 is not satisfactory, then the proper officer may initiate appropriate action under section 65 or 66 or 67 or proceed to determine tax under section 73 or 74. Here no personal hearing is required before the proper officer to explain the case.

I have taken an instance of notice for your reference which can be taken into account for filing the replies with the Tax officer in Form ASMT-11.

The copy of the notice has been attached with this article which shall be referred before reading the reply which is as under:-

ASMT-11

[See rule 99(2)]

 Reply to the notice issued under section 61 intimating discrepancies in the return

GSTIN: 09ATSPK45xxxx5

Legal Name: SXXX X

Trade Name: XXXXXXX

Reference Number: XXXXXX

Date of Notice: 08^th November, 2023

Tax Period: 2018-2019

The following are our humble submission to your notice dated. 8.11.2023 vide reference number mentioned above issued on 8^th November, 2023 which was duly received by us via E-mail on the same date.

The following are the point-to-point rebuttal to the queries as asked by your Learned GST Assistant Commissioner:

1. The taxpayer has correctly furnished the GSTR-1 and GSTR-3B returns and there is no difference between the taxable turnover as furnished in both the forms. The taxable turnover as declared in GSTR-1 is duly reconciled with the figures as reported in GSTR-3B and there is no difference apparent between the reported figures which can be corroborated with the data mentioned in the notice itself. The screenshot of the data has been attached here for your kind perusal.

2. The taxpayer is not liable to file GSTR-9 and GSTR-9C as their aggregate turnover did not exceed 2 crore rupees in the preceding Financial Year 2017-18 as per the Notification no. 47/2019-Central Tax ,dt. 09-10-2019.

3. Further, the Learned Assistant Commissioner has mentioned that there is a difference between the liability as furnished in GSTR-1 and GSTR-3B but there is no difference which can be duly acknowledged with the extract of the notice itself.

4-14: Common explanations for point 4-14:- There is no difference between the amounts as reported by the taxpayer and the amount which has been furnished in the notice.

4.15. The following are the essential provisions for availing the Input Tax Credit as per the provisions of CGST Act, 2017 which has been reproduced as under:

^*Section 16. Eligibility and conditions for taking input tax credit.-

(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,-

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;

(b) he has received the goods or services or both.

Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services-

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person;

(ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted;

(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:

Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

(3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income tax Act, 1961 (43 of 1961), the input tax credit on the said tax component shall not be allowed.

(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the ⁶[thirtieth day of November] following the end of financial year to which such invoice or  debit note pertains or furnishing of the relevant annual return, whichever is earlier.

Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.

The section 16(2) of the CGST Act, 2017 provides 4 conditions for availing the Input Tax Credit, clause (b) of which states that the Input Tax Credit can only be availed upon the receipt of goods by the registered person. 

There are several possibilities of mismatch between the Input Tax credit getting auto-filled in  Form GSTR-2A and the Input Tax Credit as availed by the taxpayer in Form GSTR-3B, one of which is clause (b) of section 16(2)  itself which requires the taxpayer to claim the Input Tax Credit only upon the receipt of goods by the registered person.

As per the data furnished by the taxpayer for the Financial Year 2018-19, there is a mismatch between the ITC as claimed by the taxpayer and the ITC as auto-populated in GSTR-2A.

The following are the differences which have been mentioned in the notice: –

ISSUE	IGST	CGST	SGST	CESS	TOTAL
ITC AS PER GSTR -2A	5,91,193.81	1,64,000.03	1,64,000.03	0.00	9,19,193.87
Total ITC availed through GSTR-3B	5,99,697.08	1,66,557.83	1,66,557.83	0.00	9,32,812.74
Difference/Excess ITC Claimed	8,503.27	2,557.80	2,557.80	0.00	13,618.87

As per the information furnished by the taxpayer, the taxpayer has claimed an excess ITC of Rs. 13,618.57 for the Financial Year 2018-19.

The reconciliations for the differences have been provided here as under for the Financial Year 2018-19:-

Particulars	IGST	CGST	SGST	Total
ITC Claimed as per GSTR- 3B	5,99,697.08	1,66,557.83	1,66,557.83	9,32,812.74
Less: ITC Claimed of last year i.e.  Financial Year 2017-18 ANNEXURE- I	11,166.00	1,620.00	1,620.00	14,406.00
Add: ITC of F.Y. 2018-19 appearing in GSTR -2A of F.Y. 2018-19 claimed in F.Y. 2019-20 ANNEXURE-II	1,142.46	0.00	0.00	1,142.46
Less: ITC Claimed in GSTR-3B but not appearing in Form GSTR-2A/GSTR-1 filed by the supplier after the cut-off date ANNEXURE- III	0.00	937.57	937.57	1,875.14
Add: Credit Note not uploaded by the supplier but we have reversed our Input Tax Credit	1,520.00	0.00	0.00	1,520.00
Rounding off difference	-0.27	0.23	0.23	0.19
ITC as per GSTR-2A	5,91,193.81	1,64,000.03	1,64,000.03	9,19,193.87

As it can be seen from the above table that the taxpayer has availed the Input Tax Credit, the details of which is not showing in GSTR-2A. The CBIC vide circular no. 183/15/2022-GST has clarified that “Where supplies were made to a registered person and invoice is issued as per Rule 46 of CGST Rules containing GSTIN of the recipient, but supplier has wrongly reported the said supply as B2C supply, instead of B2B supply, in his FORM GSTR-1, due to which the said supply does not get reflected in FORM GSTR-2A of the said registered person.” then he In cases, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR 3B”. Therefore, reading with the circular, we are attaching the supplier’s certificate and the copy of invoices which are not appearing in GSTR-2A. We have attached the invoices in Annexure No.III  and certificates from the supplier with this reply which is marked here as Annexure IV.

The ITC of Rs. CGST 561.60 and SGST Rs. 561.60 is appearing in 2A but not appearing in Table 8A due to filing of GSTR-1 by the supplier after the cut off date for the Financial Year 2018-19. We are paying the said amount along with the applicable interest thereon on the said amount as per the provisions of section 50(3) of the CGST Act, 2017. The amount which has been paid through DRC-03 are as under:

Date of invoice	Date on which tax is paid	CGST	SGST	No. of days	Interest rate	Interest amount-CGST	Interest amount-SGST
22-11-2018	06-12-2023	561.6	561.6	1840	24%	679	679

The above mentioned amount has been paid and copy of challan is attached herewith marked as Annexure-V.

4.16 The taxpayer has dutifully submitted the tax payable on reverse charge. The details of the challan have been tabularised as under along with the details of tax paid on GTA services. The freight ledger has been marked here for your reference as Annexure-VI.

Months (F.Y. 2018-19)	CPIN	IGST	CGST	SGST
APRIL	13050900222015	583	81.63	81.63
MAY	18340900209318	714	272.88	272.88
JUNE	180320900419310	1396.5	74.5	74.5
JULY	18083900168295	822	72.25	72.25
AUGUST	18092900184422	1274.75	55	55
SEPTEMBER	18103900385086	1664.25	147	147
OCTOBER	18113900264830	907	130.25	130.25
NOVEMBER	19010900237493	807.5	157.13	157.13
DECEMBER	19050900483273	629.5	196.51	196.51
JANUARY	19060900237493	668.75	55.25	55.25
FEBRUARY	19090900220593	941.5	82.5	82.5
MARCH	19010900527766	809.5	83	83
Total:		11,218.25	1,407.9	1,407.9

The taxpayer has always complied with the applicable laws and regulations as stated in the Goods and Services Tax Act, 2017 and the rules made thereunder. In light of above-mentioned grounds, I most respectfully request that you consider dropping the proceedings related to the notice and kindly annul the associated demand.

I deeply appreciate your kind attention to this issue and hope for a resolution that upholds the principles of justice.

Thanking you for your gracious cooperation.

The above is an example of a standard reply where the taxpayer is having a turnover upto 2 crore. The above reply will vary from taxpayer to taxpayer based on the information as asked and the reconciliations which have been provided. So, you may refer only the explanations which have been provided and the references of circulars and provisions which has been referred to.

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