Preface

More than six years have passed since the indirect taxation regime i.e. Goods and Services Tax (GST) has come into force in India. The industries as well as the tax professionals have become used to with the law and procedures relating to GST.

In March, 2022, the CBIC issued Standard Operating Procedure (SOP) for Scrutiny of Returns under Instruction No. 02/2022-GST, dt. 22-3-2022 for Financial Year 2017-18 and 2018-19. Further the process of scrutiny of returns for the financial year 2017-18 and 2018-19 has already completed. The limitation period for passing adjudication order under section 73(9) of the CGST Act for the Financial Year 2017-18, which was extended upto 30-04-2024,[1] has already expired. For the Financial Year, 2019-20, the limitation period for passing order under section 73(9) has been extended till 31-08-2024. Consequently, the limitation period for issuance of show cause notice for the said period also stands extended upto 31-05-2024.

On 26-05-2023, the CBIC issued Standard Operating Procedure for Scrutiny of Returns for FY 2019-20 onwards vide Instrudtion No. 02/2023-GST, dt. 26-5-2023. DG Systems has developed functionality "Scrutiny of Returns", containing the online workflow for scrutiny of returns in the CBIC ACES-GST application. Advisory No. 22/2023-Returns dated 16-05-2023 has also been issued by DG Systems in this regard, along with a User Manual providing for the detailed workflow of the said functionality. The GSTINs selected for scrutiny for the Financial Year 2019-20 have also been made available on the scrutiny dashboard of the proper officers on ACES-GST application (in case of assessees with Jurisdiction).

In view of the above, the SOP for scrutiny or returns provided in the Instruction No. 02/2022-GST, dt. 22-3-2022 has been modified to certain extent.

In the case of taxpayers falling under the Central Jurisdiction, scrutiny of return of a taxpayer would be conducted by Superintendent of Central Tax in-charge of the jurisdiction range and in the case of taxpayer's falling under State jurisdiction, the scrutiny of returns would be conducted by the jurisdictional State Tax Officer.

The taxpayer whose return is selected for scrutiny shall be issued a notice in the Form GST ASMT-10 by Proper Officer informing him of the discrepancies noticed and seeking his explanation thereto. Usually, a time period of one month would be granted to the taxpayer to file his explanation. The registered person may accept the discrepancy mentioned in the notice and pay the tax, interest and any other amount arising from such discrepancy through FORM GST DRC-03 and inform the same or may furnish an explanation for the discrepancy in FORM GST ASMT-11 to the proper officer within the time period prescribed under rule 99 of CGST Rules. Where the explanation furnished by the registered person or the information submitted in respect of acceptance of discrepancy and payment of dues is found to be acceptable by the Proper Officer, he shall conclude the proceedings by informing the registered person in FORM GST ASMT-12.

In case no satisfactory explanation is furnished by the registered person in FORM GST ASMT-11 within a period of thirty days after 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 pay the tax, interest and any other amount arising from such discrepancies, the proper officer, may proceed to determine the tax and other dues under section 73 or section 74. For initiating proceeding under section 73 or section 74 of the CGST Act, monetary limit as specified in Circular No. 31/05/2018-GST, dt. 9-2-2018 is required to be adhered to.

However, if the proper officer is of the opinion that the matter needs to be pursued further through audit or investigation to determine the correct liability of the said registered person, then he may refer the matter to the jurisdictional Principal Commissioner/Commissioner through the divisional Assistant/Deputy Commissioner, for the decision whether the matter needs to be referred to Audit Commissionerate or Anti-evasion Wing of the Commissionerate, as the case may be.

Since the ultimate consequence of the scrutiny of return may result in assessment of tax under section 73 or section 74, audit of records of the taxpayers and initiation of recovery proceeding, it is necessary to handle the scrutiny proceeding very carefully and efficiently, of course by observing the statutory timelines. Missing the statutory timeline may lead to adverse consequences in the form of ex-parte assessment and recovery of consequential tax, interest and penalty.

The present book has been written with a view to providing an overview of law and practice relating to Scrutiny of GST Returns, Assessments, Departmental Audits, Adjudication Proceedings, Recovery Proceedings, Provisional Attachment of Bank Account and Remedial Measures.

For ease of convenience of readers, the book has been divided into the following six parts, namely;

Part I : Filing of GST Returns

Part II : Handling Scrutiny of Returns

Part III : Handling GST Audits

Part IV : Handling Assessment and Adjudication Proceedings

Part V : Handling Appellate Proceedings

Part VI : Draft Replies and Submissions

Part I contains chapters relating to filing of monthly/quarterly returns and statements under GST, furnishing of details of outward supplies and filing of annual return.

Part II provides an overview of scrutiny provisions, various parameters for selection of returns for scrutiny and strategy to be followed by the taxpayers in tackling different issues.

Part III aims at providing an overview of the provisions relating to departmental audit, audit procedure and compliance to be done by taxpayers.

Part IV contains an overview of law and procedures relating to different types of assessments to be made under the GST law, namely, Self-Assessment, Provisional Assessment, Best-Judgment Assessment, Assessment of Unregistered Persons, Summary Assessment and Filing of Application for Rectification of Mistake. It also provides an overview of penalty provisions and recovery measures to be adopted by the departmental officers.

Part V aims at discussing the law and procedures relating to remedial measures under the GST law i.e. Filing Appeal to Appellate Authority, Filing Appeal to Appellate Tribunal and Filing Appeal to High Court and Supreme Court.

Last but not the least, Part VI contains some real life draft replies and submissions on the issues of concurrent importance viz., ITC mismatch in GTSTR-2A - GSTR-3B, mismatch of tax liability in GSTR-1 - GSTR-3B returns, denial of ITC due to section 16(4), etc. The draft replies are expected to be of immense help for the taxpayers and tax professionals in preparing their replies to the Scrutiny notices as well as Show Cause Notices.

The key characteristics of each chapter may be summarised as under :

(i) Commentary on statutory provisions

(ii) Step-by-step observation of GST procedures

(iii) Ratios of landmark case law incorporated in the text

(iv) Practical FAQs issued by GSTN reproduced in Appendix to each chapter

(v) Full text of Relevant Circulars, Instructions, SOPs reproduced in Appendix to each chapter

(vi) Text of GST Forms, Returns, Notices and Orders also reproduced in Appendix to each chapter

The text is updated by the amendments made by the Finance Act, 2023 and the Notifications, Circulars and Instructions issued till date.

It is believed that the books would be of immense help to the taxpayers and tax professionals in handling GST Scrutiny, Audit, Assessment and Adjudication proceedings.

Notwithstanding the best of our care, the likelihood of certain shortcomings having crept into this book cannot be ruled out. I, therefore, solicit creative feedback from my esteemed readers to bring to my notice any mistakes, errors, omissions or discrepancies, as and where noticed by them.

JODHPUR	CA. SATYADEV PUROHIT
10th MAY, 2024
AKSHAYA TRITIYA