What is Scrutiny of returns under GST

Posted on 10 June 2022 Category : GST terms

Meaning of term Scrutiny of returns under GST

In this article, the information about Scrutiny of returns under GST is explained here.

Scrutiny of returns

The proper officer may scrutinize the return and related particulars furnished by the taxable person to verify the correctness of the return in such manner as may be prescribed.
The proper officer shall inform the taxable person of the discrepancies noticed, if any, after such scrutiny in such manner as may be prescribed and seek his explanation thereto.
In case the explanation is found acceptable, the taxable person shall be informed accordingly and no further action shall be taken in this regard.
In case no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period as may be permitted by him or where the taxable person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the proper officer may initiate appropriate action including those under section 63, 64 or section 79, or proceed to determine the tax and other dues under sub-section (7) of section 66 or under sub-section (7) of section 67

In view of the self-assessment procedure wherein the assesse himself assesses the duty liability, the responsibility of the departmental officers is to scrutinize the assessment made for verification of its correctness. Return scrutiny is the first line of verification carried out as soon as the tax return is submitted by the assesse. A returns scrutiny process consists of two parts viz. preliminary scrutiny and detailed scrutiny. While the preliminary scrutiny system covers all the returns filed online, detailed scrutiny system covers a few returns selected on the basis of identified risk parameters. In exercise of powers conferred under sub-rule (3) of rule 12 of the Central Excise Rules, 2002, Board hereby lays down following guidelines for detailed scrutiny of Central Excise Returns:

i. Detailed Scrutiny of Central Excise returns should be conducted regularly by the proper officers in the field following the procedure already prescribed. Detailed scrutiny of a minimum of 2% and maximum of 5% of the total returns received in a month shall be mandatorily performed by the proper officer.

ii. Selection of assesses by the Commission rates for detailed scrutiny shall be based on Risk score and procedure for using it, as forwarded by DG (Audit) vide letter F. No. 381/20/2015 dated 18.05.2015. Chief Commissioners and Commissioners shall also have powers to manually select returns for detailed scrutiny using such criteria as deemed fit to further complement the list of assesses selected on the basis of risk. After selection of units centrally, month-wise detailed scrutiny plan should be laid down by the Commissioned rate headquarters for each Range, conveyed to the Range and monitored for compliance.

iii. As assesse who has been selected for audit in a given financial year shall not be selected for detailed scrutiny. Further, once the return of an assessed has been selected for detailed scrutiny, the return of the assesse should not be selected again for the next 12 months for detailed scrutiny.

iv. Once an assessed has been selected for detailed scrutiny, most recent return filed by that assesse should be used for conducting the detailed scrutiny. During the course of detailed scrutiny of Central Excise returns by proper officer, the documents and records of assesses, where necessary, may be called for verification by proper officer.

v. In Composite Ranges where there are both Central Excise and Service Tax assesses, the total number of Central Excise and Service Tax returns to be taken up for detailed scrutiny shall be same as prescribed at para

(i) Above. The ratio of returns for Service Tax & Central Excise to be scrutinized in a composite range shall be in the ratio of the number of assesses registered as Service Tax and Central Excise assesses respectively. For detailed scrutiny of Service Tax returns, Board's Circular No. 185/4/2015-Service Tax dated 30.06.2015 may be referred.

vi. On issues relating to difficulty, if any, in access of returns on ACES, DG (Systems) shall be directly contacted/ appraised by the Chief Commissioner/ Commissioner concerned. Where the problem persists over a long period of time, the same may be brought to the notice of the Board. In the interim, where necessary, printouts of the return may be taken from ACES and detailed scrutiny done manually using the printout.

vii. Past circulars/ manuals/ instructions on detailed scrutiny in conflict with above instructions shall stand rescinded to the extent of the conflict.

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