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CBIC issues SOP for scrutiny of returns for FY20 onwards


The Central Board of Indirect Taxes and Customs (CBIC) has issued a detailed standard operating procedure (SOP) for scrutiny of returns under the goods and services tax (GST) regime for financial year 2019-20 onwards.

The SOP prescribes to keep the scrutiny process with minimal interface with the taxpayers, restricting officials to send a single notice for one financial year that also after verifying from the latest records. The procedure specifies that the notice should not be vague and must quantify the exact discrepancy in return, amount of tax, interest or any other amount payable and must allow the taxpayer the prescribed time limit of 30 days to explain the discrepancies .

“It may also be ensured that the discrepancies so communicated should, as far as possible, be specific in nature and not vague or general,” the SOP circular said.

It also asks officials to communicate about the scrutiny notice to taxpayers by the system on the common portal, without the need of sending a manual communication.

“There will be no need for sending any manual communication of notice in FORM GST ASMT-10 by the proper officer to the registered person separately,” it said.

A scrutiny notice is issued through Form ASMT-10 intimating discrepancies in GST return along with tax, interest and penalty if any.

Also it asks the proper officer to mention the parameter-wise details of the discrepancies noticed by him in FORM GST ASMT-10 and to upload the worksheets and supporting documents.The SoP says that for one financial year, a single form ASTM-10 can be compiled after checking all documents, to prevent multiple notices for the same discrepancy. The proper officer has to do scrutiny of a minimum of four GST Identification Number (GSTINs) per month.

Only after no satisfactory explanation is furnished by the registered person within a given time frame or where taxpayers, after accepting the discrepancies, fail to pay the tax, interest , the proper officer may proceed to determine the tax and other dues under section 73 or section 74 of CGST Act.

Also it asks officials to prioritize cases which are riskier and have higher revenue implication while preparing scrutiny schedules and officials must send notice within 30 days of the scrutiny schedule listed on the system, based on risk parameters.

The circular also clarifies that the online scrutiny process through on ACES-GST application will be only for the Financial Year 2019-20 onwards, and scrutiny for the financial years 2017-18 and 2018-19, earlier scrutiny methods will be followed.

“These SOP would bring a uniform and consistent methodology to authorities to perform the scrutiny of returns filed by taxpayers,” Abhishek Jain, Partner & National Head – Indirect Tax, KPMG says.

“Now businesses should take a proactive step and prepare requisite reconciliations with intact reasons/ records to substantiate such differences,” he adds.

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