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MEDIUM SEVERITYSection 61 • CGST Act, 2017

GST Scrutiny Notice

GST scrutiny notice is issued when the officer examines your returns to verify their correctness. It's the mildest form of inquiry but must be taken seriously.

Quick Answer

A GST scrutiny notice under Section 61 means your returns are being examined for correctness. Reply within 30 days with explanation and supporting documents to close the matter.

⏰ Deadline: 30 days💰 Penalty: No penalty for scrutiny itself

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What is Scrutiny Notice?

Scrutiny of returns under Section 61 is the first level of examination by GST authorities. The proper officer scrutinizes returns to verify their correctness and may issue ASMT-10 if discrepancies are found.

How scrutiny works: 1. Officer selects returns for scrutiny (based on risk parameters or random selection) 2. Compares GSTR-1, GSTR-3B, GSTR-9, e-way bills, and third-party data 3. If discrepancies found → issues ASMT-10 notice 4. Taxpayer replies in Form ASMT-11 within 30 days 5. If reply accepted → scrutiny closed 6. If not accepted → may escalate to Section 73/74 proceedings

Scrutiny is NOT an audit or investigation. It's a desk review that happens routinely. Don't panic, but do respond properly.

Common scrutiny parameters: - High ITC-to-turnover ratio - Frequent nil returns followed by large claims - Mismatch between GSTR-1 and GSTR-3B - Discrepancies flagged by BIFA (Business Intelligence and Fraud Analytics)

Why You Received Scrutiny Notice

  • •Random selection for scrutiny
  • •High ITC-to-output ratio flagged by system
  • •GSTR-1 and GSTR-3B mismatch
  • •Large ITC claims in specific months
  • •Refund claims triggering scrutiny
  • •Third-party data mismatch

How to Respond to Scrutiny Notice — Step by Step

  1. 1Don't panic — scrutiny is routine and not a demand
  2. 2Read ASMT-10 carefully for specific discrepancies
  3. 3Reconcile your returns for the period mentioned
  4. 4Prepare point-wise reply addressing each discrepancy
  5. 5File ASMT-11 within 30 days
  6. 6Keep copies of all documents submitted

Documents Required for Scrutiny Reply

  • 📄GSTR-1, GSTR-3B, GSTR-9 for the period
  • 📄ITC reconciliation (GSTR-2B vs books)
  • 📄Sales and purchase registers
  • 📄Bank statements
  • 📄Stock register (if applicable)
  • 📄E-way bills

Expert Tips for Scrutiny Reply

✅Treat scrutiny as an opportunity to demonstrate compliance
✅Be thorough but concise in your explanations
✅If there's a genuine error, admit it and show correction
✅Provide reconciliation tables for easy officer review
✅Follow up if you don't hear back within 30 days of reply

Frequently Asked Questions About Scrutiny

What is GST scrutiny notice?

▼
A GST scrutiny notice is issued under Section 61 when the tax officer examines your returns to verify correctness. If discrepancies are found, ASMT-10 is issued asking you to explain the differences.

Is scrutiny notice serious?

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Scrutiny is the mildest form of inquiry — NOT a demand or penalty notice. However, if you don't reply properly, it can escalate to Section 73/74 proceedings which are serious.

How to avoid GST scrutiny?

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File returns on time, ensure GSTR-1 and GSTR-3B match, reconcile ITC with GSTR-2B regularly, avoid sudden spikes in ITC claims, and file annual return (GSTR-9) accurately.

Can scrutiny lead to penalty?

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Scrutiny itself carries no penalty. But if discrepancies are confirmed and you don't rectify them, the officer can initiate Section 73/74 proceedings which carry penalties of 10-100%.

Related GST Notices

ASMT-10medium

GST Scrutiny Notice (ASMT-10)

ASMT-12medium

GST Provisional Assessment Order (ASMT-12)

Section 73high

GST Notice Under Section 73

DRC-01high

GST Show Cause Notice (DRC-01)

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