Summary: Section 61 of the GST Act allows tax officers to scrutinize returns and issue a notice in Form ASMT-10 if discrepancies are found. This notice is not a demand for payment but rather an inquiry into issues such as excess Input Tax Credit (ITC) claims, under-reported tax liabilities, or mismatches between GSTR-1, e-invoices, and e-way bills. Upon receiving an ASMT-10, the registered person has 30 days to respond in Form ASMT-11. In their reply, they can either explain the discrepancies, or pay the tax and penalty. If the officer is satisfied with the explanation and/or payment, they will issue a closure order in Form ASMT-12. However, if the reply is not satisfactory or no reply is filed, the officer may proceed with further actions, including an audit (Section 65), inspection and seizure (Section 67), or the determination of tax not paid (Sections 73, 74, or 74A). While no specific time limit exists for issuing an ASMT-10, it cannot be issued after the time limit for demand notices under Sections 73, 74, or 74A has expired.
Sec. 61 of GST Scrutiny of returns: ASMT-10, ASMT-11 & ASMT-12:-
1.Scrutiny of returns:-
a. Officer can issued notice in number of cases:-
-
- Excess ITC claimed in the GSTR-3B
- Less tax paid in the GSTR-3B in comparison to GSTR-1/1A
- The late filing fees for GSTR-1 were not paid
- The late filing fees for GSTR-3B were not paid. Officer can issue notice in this case when the due date of GSTR-3B was extended.
- Input Tax Credit has been wrongly claimed on invoices that are ineligible under GST law
- ITC has been claimed, but the supplier has not filed GSTR-3B, so tax has not been paid to the government.
- A taxpayer making exempt supplies has either not reversed or has reversed less ITC, as required under Rule 42/43 of GST.
- E-invoices not generated but invoices shown in the GSTR-1
- Liability shown in the GSTR-1 is mismatched with the e-invoices generated
- The value of supplies as per e-way bills does not match with the sales reported in GST returns.
2. Full form of ASMT:
Full form of ASMT is Assessment.
3. ASMT-10:-
This form will be issued by the GST officer for the above mentioned cases after scrutiny of returns. It is only a notice & not a demand notice for recovery of taxes or penalties.
4. Section 61:
ASMT-10 is issued by the officer u/s Sec 61 for the above mentioned cases if there are discrepancies in the returns.
5. ASMT-11:
The registered person will submit the reply in Form ASMT-11 within the prescribed period i.e 30 days by explaining the each & every ground raised by the officer.
a, If registered person is aggrieved by the officer then he will file the reply in ASMT-11. There is no requirement to pay the taxes through DRC-03.
b. If registered person is partially aggrieved by the officer then he will file the reply in ASMT-11 along with the payment through DRC-03.
6. ASMT-12:
a.If officer is satisfied with the reply furnished by the person then he will issue the closure order in Form ASMT-12 & no further action will be taken by the officer.
b. If officer is not satisfied with the reply furnished by the person then he will take the further action & he will not pass the order in ASMT-12.
7. Further actions by the officer:
Further action will be taken by the officer if he is not satisfied with the reply furnished by the registered person in ASMT-11:
a. Section 65: GST audit by authorities
b. Section 66: Special audit
c. Section 67: Inspection, Search & Seizure
d. Section 73: Determination of tax not paid or short paid other than fraud or wilful misstatement or suppression of facts
e. Section 74: Determination of tax not paid or short paid by reason of fraud or wilful misstatement or suppression of facts
f. Section 74A: Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onward
8. Time limit for issuing of ASMT-10:
No time limit is prescribed for issuing of notice u/s 61 but officer can-not issued ASMT-10 after expiry of time limit prescribed under Sec 73 or 74 or 74A.
9. Time limit for reply:
Time limit for filing of a reply in ASMT-11 is 30 days from the date of serving of the notice or extended time.
10. Rule 99:
| S. No. | Nature | Rule 99 |
| 1 | ASMT-10 | Notice will be issued u/r 99(1) |
| 2 | ASMT-11 | Reply will be filed u/r 99(2) |
| 3 | ASMT-12 | Closure order will be passed u/r 99(3) |
11. Officer actions against reply:
| S. No. | Reply | Action by the officer |
| 1 | If officer is satisfied with the reply | He will pass the closure order in ASMT-12 |
| 2 | If officer is not satisfied with the reply | He will take the further action u/s 65, 66, 67, 73, 74, 74A. |
| 3 | If no reply furnished | He will take the further action u/s 65, 66, 67, 73, 74, 74A. |
12. In most of the cases, officer will take further action by issuing an intimation in DRC-01A Part-A or by issuing a notice in DRC-01 under section 73 or 74 or 74A. These topics will be covered in a separate article.
13. Time petition:
a. A person can file an application of extension of time to submit a reply to the notice.
b. There is no separate form prescribed for this.
c. It will be filed in form ASMT-11.
14. Expiry of time:
If the time period for filing a reply to the notice has expired, the reply cannot be submitted on the GST portal. In such cases, the reply must be submitted physically at the GST office or sent via email to the concerned GST officer.
15. Note:
a. ASMT-10 cannot be issued again for the same grounds for the same financial year.
b. ASMT-10 can be issued again for different grounds for the same financial year.
c. ASMT-10 can be issued for one year. For different years, separate notices will be issued by department.
16 ASMT-10:
GST ASMT-10
[See rule 99(1)]
17. ASMT-11:
Form GST ASMT-11
[See rule 99(2)]
Reply to notice issued under section 61 intimating
discrepancies in the return
18. ASMT-12:
Form GST ASMT-12
[See rule 99(3)]
19. Bare Act of Rule 99:-
Rule 99. Scrutiny of returns.-
(1) Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same in accordance with the provisions of section 61 with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10 , informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding thirty days from the date of service of the notice or such further period as may be permitted by him and also, where possible, quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy.
(2) The registered person may accept the discrepancy mentioned in the notice issued under sub-rule (1), and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy in FORM GST ASMT-11 to the proper officer.
(3) Where the explanation furnished by the registered person or the information submitted under sub-rule (2) is found to be acceptable, the proper officer shall inform him accordingly in FORM GST ASMT-12.
20. Bare Act of Section 61: Scrutiny of returns:
Section 61. Scrutiny of returns.-
(1) The proper officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner as may be prescribed and seek his explanation thereto.
(2) In case the explanation is found acceptable, the registered person shall be informed accordingly and no further action shall be taken in this regard.
(3) In case no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period as may be permitted by him or where the registered person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the proper officer may initiate appropriate action including those under section 65 or section 66 or section 67, or proceed to determine the tax and other dues under section 73 or section 74 1or section 74A.
1. Inserted by section 129 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
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