Every GST-registered dealer under the GST Act is expected to self-assess the tax payable and file a GST return without the GST department’s intervention.

The process of declaration of outward supply, payment of taxes, and filing other forms is called self-assessment. The majority of compliance in the GST Act is implemented based on self-assessment and trust.

Even though the GST Act is a trust-based and self-assessment tax regime, compliance with the tax payable by the dealer must be monitored.

To ascertain the correct amount of tax payable by the dealer, scrutiny of returns U/s 61 is carried out by the GST department.

What is the GST Notice for discrepancies in GST return in form ASMT-10?

The GST officer will scrutinize the return and related particulars U/s 61 to verify the correctness of the return and other details submitted.

If the officer finds any discrepancies in the return he will issue a notice under Rule 99 in FORM GST ASMT-10 to seek an explanation with relevant particulars.

The dealer needs to reply to the notice in form GST ASMT-11 within 30 days from the date of service of the notice, there may be a situation where the time limit is mentioned is less than 30 days, in such case, the reply should be filed within the due date mentioned in the notice.

After receiving the reply to gst notice, if the officer finds the explanation satisfactory, the officer will issue a confirmation in the form GST AMST-12 accepting the explanation as satisfactory.

Where the explanation is not satisfactory, the officer will initiate the action under the following provisions

Where the reply and explanation submitted are partly acceptable or not entirely acceptable, the officer can initiate any of the actions below

• Audit U/s .65 by the commissioner or other officer authorized by him, the department officers will conduct audit U/s.65, therefore the scope of the audit, and the financial year for which the audit should be conducted will be determined by the tax authorities. Audit by the tax authorities U/s.65 can be conducted for multiple financial years or multiple issues.
• Direct conduct of special audit by chartered accounted or cost accountant U/s 66, nominated by the commissioner, the dealer does not have any option to appoint the chartered accountant of his choice.
• Inspection U/s 67 can be carried out by the GST department officer with the approval of a joint commissioner or other officer of higher rank.
• Initiate proceeding U/s 73 for discrepancies not relating to fraud or wilful misrepresentation of facts, in the case of issues relating to fraud and willful misrepresentation of facts proceeding U/s.74 will be initiated, for determination of tax and other dues to the department.

Situations where ASMT-10 notice will be issued by the GST department

GST ASMT-10 notice and action under section 61 can be initiated only when the returns for the specific period are filed, the main condition for issuing ASMT-10 notice is there must be discrepancies in the returns filed, so notice in form GST ASMT-10 cannot be issued based on data other than of GST return.

ASMT-10 notice for difference between GSTR-3B and GSTR-1

If there is a difference between tax liability declared in GSTR-3B and GSTR-1 the officer will issue an ASMT-10 GST notice, asking explanation regarding the reason for the difference. There will be a difference between these returns in case of credit reversals, and other adjustments in GSTR3B, where the difference is due to the correct application of rules the dealer is required to provide a reconciliation statement for tax difference.

ASMT-10 notice for Difference between GST return and E-way bill

In rare cases notice in FORM GST-ASMT-10 will be issued for the mismatch between the GST return and E-Way bill, the mismatch between E-way bill data and the GST return data is common due to the time of e-way bill and time of invoicing, advance received in previous return period for goods transported, etc. It is always recommended to maintain the records of E-way bill history generated, cancelled, modified, etc.

ASMT-10 notice for the difference between input tax credit in auto-drafted input tax credit statement and GSTR-3B

Input tax credits claimed in GSTR-3B and GSTR-2A will differ in some genuine cases of reversal of input tax credit, the claim of input tax credit reversed in the previous period, etc. This difference generally arises in the case of our accounting data being completely relied on for input tax credits, the date of GST return filing by our suppliers will affect the input tax credit available. This can be avoided by preparing a reconciliation of the input tax credit eligible as per GST auto-drafted details, and input tax credit as per accounting records.

How to respond to GST ASMT-10 notice?

Serving GST ASMT-10 is the initial step taken by the department to collect the correct taxes and other dues, where the dealer has not calculated the correct tax liability, or input tax credit.

There are no specific penalties or other charges associated with the ASMT-10 GST notice, the proceeding will be closed once the dues mentioned in the GST notice are paid, or the reply is satisfactory. Therefore, penalties U/s 73 or 74 can be avoided when the demand is paid at this stage.

Advanced assessment proceedings such as action U/s 73 or U/s 74 can be avoided, where the dealer has taken necessary steps at this stage.

Response to GST ASMT-10 notice should be responded with suitable data such as reconciliation statements, invoices, and detailed explanatory statements for differences. It is advisable to get the services of a GST auditor for notices to provide valid and accurate responses, getting professional support from an auditor for a GST notice will help you to find the exact reason for the GST notice and the right solution.

Where the discrepancies mentioned in the notice are not correct, the dealer can object to the discrepancies, and the officer will accept if the relevant reason and justifications are provided.

Response to the notice should be provided within 30 days or such short time or extended time mentioned in the notice, in case the response is not provided within the time allowed, the reply window will be closed, and an officer will proceed to initiate action under other sections.

As a precautionary practice, after the approval of GST registration, it is recommended to check the GST notices section to make sure all notices are replied to on time.