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Scrutiny Of Returns under GST Act. [ Sec. 61 of the CGST Act, 2017]

Section 61

Sec. 61 of the CGST Act, 2017, as applicable under IGST Act, 2017, UTGST Act, 2017 & maybe SGST Law, authorizes the proper officer to scrutinize, verify the correctness of the returns and other data furnished by the taxpayer and communicate discrepancies noticed, if any, to the tax payer and seek his explanation on such discrepancies. If the explanation offered is found acceptable by the proper officer, the proceeding shall be dropped, the taxpayer shall be informed and no further action in the matter shall be taken. If, however, the taxpayer

•          does not furnish a satisfactory explanation within 30 days of being informed (extendable by the proper officer), or

•          does not take any corrective action in his return in which discrepancy is accepted,

the proper officer may initiate appropriate actions including:

1.         Audit under section 65 or under section 66 of the Act.

2.         Inspection, search/seizure under section 67

3.         Adjudication proceedings for determining the tax liability under section 73 or section 74.

The return contains information regarding, inter alia, details and classes of supply and receipts during a tax period, the output tax, input tax credit, tax payable, tax deducted at source, etc. The related particulars primarily include the details of inward and outward supplies containing invoice-wise details along with commodity codes.
The scrutiny is to be conducted with a view to ascertain and verify the correctness of the said return and related particulars. The words “correctness” or “correct” have not been defined in the Act. Webster’s Encyclopaedia Unabridged Dictionary of the English Language defines the word “correct” as “conforming to fact or truth; free from error;
accurate”. Accordingly, the process of scrutiny should be undertaken to ensure that all transactions undertaken by the taxpayer during the tax period have been disclosed fully and classified in the manner that has been mandated by, and is in conformity with the provisions of law. The Rules may lay down a set of parameters along with the benchmark in respect of each such parameter. The objective of the process of scrutiny would be to assess or verify the level of compliance of the return and related particulars with regard to such benchmarks. For this purpose the proper officer will also make use of any other relevant information regarding the transactions of the taxpayer.

The following table summaries the process flow and the forms specified for scrutiny of return under the draft assessment and audit rules:


By whom

Event & time limit

Form No.

section of

provision of
and audit


Proper officer

Notice for scrutiny






Explanation in response to notice in Form GSTASMT -10 within 15 days from the date of service of notice





Proper officer

In case information submitted in GST ASMT-10 is acceptable to proper officer




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