Interim Standard Operating Procedure (SOPs) issued by CBIC for scrutiny of returns for FY 2017-18 and 2018-19
This is to apprise you with the detailed Standard Operating Procedure (‘SOP’) for scrutiny of returns for FY 2017-18 and 2018-19 issued by the Central Board of Indirect Taxes and Customs (‘CBIC’) vide Instruction No. 02/2022-GST dated 22 March 2022. The same is summarised and mentioned herein below for your easy reference:
Para 3-Selection of returns for scrutiny: 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 DDM portal (to the nodal officer of the Commissionerate concerned) for further action.
Para 4-Proper officer for scrutiny of returns: Proper officer for the said scrutiny shall be the ‘Superintendent of Central Tax’ of the jurisdictional range of the said taxpayer.
Para 5-Scrutiny Schedule: Based on the selected list of GSTINs, a monthly scrutiny Schedule shall be prepared with approval of the divisional Assistant / Deputy Commissioner. The GSTIN which appears riskier based on the likely revenue implication indicated by DGARM, may be prioritized. 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.
Para 6-Process of scrutiny by the Proper Officer: In the Process of scrutiny, various data as 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 replied upon. An indicative list of parameters is prescribed in Annexure B. The officer shall use all the information available with him and then communicate the discrepancies in ASMT-10 for a complete financial year (‘FY’) quantifying the amounts as much as possible after considering all the payments already made through DRC-03 as well by the taxpayer. If the same is accepted and paid by taxpayer, proceedings shall be dropped otherwise the proper officer, may proceed to determine the tax and other dues under section 73 or section 74.
Para 7-Timelines for scrutiny of returns: Scrutiny of returns is to be conducted in a time bound manner and for the same, process-wise timelines have been observed (para 7 of the instruction).
Para 8-Reporting and Monitoring: The proper officer shall maintain a scrutiny register in format prescribed in Annexure C. Further, a Scrutiny Progress Report in Annexure D shall also be prepared by the proper officer at the end of every month and this progress report will be forwarded to the Director General of Goods and Service Tax (DGGST) by 10th day of the succeeding month.
Para 9- Till the time scrutiny module is made available on the CBIC-GST application/AIO for CBIC officers, the aforesaid interim procedure for scrutiny of returns may be conducted on manual basis. Any communication with the taxpayer for the purpose of scrutiny shall be made with the use of DIN as per the guidelines mentioned in the Circular No. 122/41/2019-GST dated 5th November 2019.
Para 10-This SOP is envisaged to enable the department to leverage technology and risk-based tools to encourage self-compliance and to conduct scrutiny of returns with minimal interaction with the registered persons.
Indicative list of parameters for scrutiny: Indicative list of parameters have been provided for verification purposes. Some of them are as mentioned below:
- Tax liability declared in GSTR-1 to be verified with the liabilities declared in GSTR-3B
- RCM paid via cash should not be lesser than the amount of ITC availed in respect to reverse charge transactions
- RCM liability declared in GSTR-3B should not be lesser than the RCM liability appearing in GSTR-2A
- ‘All Other ITC’ availed in GSTR-3B can be verified with GSTR-2A
- Liability declared in GSTR-3B should be verified with tax liability declared in e-way bill
- No ITC can be availed in respect to invoices issued by supplier (after effective date of cancellation) whose registration has been cancelled
- Where 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.
- ITC availment in respect to such invoices needs to be checked where GSTR-3B has not been filed by the supplier.
- ITC availed in respect of import of goods as per GSTR3B with Table 10 and 11 of GSTR2A.
- Reversals of ITC in accordance with provisions of rule 42 and rule 43 of the CGST Rules
- Payment of interest liability in terms of section 50 and late fee in terms of section 47 in respect of returns/statements
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