How to reply notice for mismatch in GST RETURN ?

Notice for mismatch in GST RETURN

GST officers have started issuing notice for mismatch in GST returns and discrepancy in GST returns

Mismatch in GST RETURN

Taxable persons  would have started getting notices from GST department officer seeking explanation for the discrepancies observed in GST returns after making scrutiny of returns. Normally department is seeking explanation with respect to mismatch between the amounts shown in GSTR  3B and the amounts shown in GSTR – 1. What should be done about such notices ?

Meaning of return

“Return” means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder; [ Section  2(97) of the CGST Act, 2017 ]

Rule – 61 of CGST Rules 2017 deals with Form and manner of submission of monthly return

Rule 61(5) of the CGST Rules, 2017 provide as under:

“Where the time limit for furnishing of details in FORM GSTR-1 under section 37 of CGST act 2017 (Furnishing details of outward supplies.)  and in FORM GSTR-2 under section 38 of CGST Act 2017 ( Furnishing details of inward supplies.)   has been extended and the circumstances so warrant, the Commissioner may, by notification, 1[specify the manner and conditions subject to which the] return shall be furnished in FORM GSTR-3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.”

[Note 1: Substituted for “specify that” by the Central Goods and Services Tax (Fifth Amendment)Rules, 2017, w.r.e.f. 1-7-2017.]

Comment : Thus GSTR  3B is a return as defined u/s 2(97) of the CGST Act, 2017. Hence proper officer has power to scrutinize such return and related particulars furnished by the registered person.

Relevant Sections of GST Act for issuing Notice for Mismatch of GST Return

Section 61 of CGST Act 2017 Scrutiny of returns.  :-

“(1) The proper officer may scrutinize the return and related particulars furnished by the registered person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner as may be prescribed and seek his explanation thereto.

(2) In case the explanation is found acceptable, the registered person shall be informed accordingly and no further action shall be taken in this regard.

(3)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 registered 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 65.( Audit by tax authorities.) or Section 66. (Special audit ) or Section 67 (Power of inspection, search and seizure.), or proceed to determine the tax and other dues under Section 73 . (Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful misstatement or suppression of facts) or Section 74.( Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts)

How mismatch in GST returns will be intimated

Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same in accordance with the provisions of section 61 of CGST act 2017  with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10, informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding thirty days from the date of service of the notice or such further period as may be permitted by him and also, where possible, quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy. [ Rule 99(1) of the CGST Rules, 2017 ]

Comment :

• FORM GST ASMT-10 has been prescribed for issuing Notice for intimating discrepancies in the return after scrutiny by GST officer. Thus GST Officer can seek explanation for the discrepancies observed in GST returns.
• The officer is simply required to mention the discrepancy observed and allow time to the registered person to furnish explanation against such notice.
• Quantifying the tax amount is not mandatory . It is to be done wherever possible.

Time Limit to reply to the Notice of Mismatch in GST Return

As per Section 61 (3) of CGST Act 2017  :-

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………….

As per Rule 99(1) of the CGST Rules, 2017 :- 

Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same in accordance with the provisions of section 61 of CGST act 2017  with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10, informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding thirty days from the date of service of the notice or such further period as may be permitted by him…………….

Comment

• Rule 99(1) of CGST Rule 2017 stipulating period lesser than 30 days is in violation to Section 61(3) of CGST Act 2017.  Section 61(3) of the CGST Act, 2017 clearly provides for the minimum time limit of 30 days of being informed to submit an explanation. But Rule 99(1) of CGST Rules provides  not exceeding thirty days from the date of service of the notice……………..
•  Period to reply to notice will start from the date of being communicated and not from the date of issuance of notice. Hence the period will start from date of receipt of notice.

 Whether the word “serve” would mean the date of “issue” of notice or the date of “receipt” of notice ?

Punjab & Haryana High Court in the case of V.R.A. Cotton Mills (P.) Ltd. [2013] 359 ITR 495/33 has taken a view that the expression “serve” and “issue” are interchangeable. Said ruling was in the context of Sec. 143(2) of the Income Tax Act, 1961.

 Gujarat High Court in the case of Principal Commissioner of Income-tax v. Nexus Software Ltd [2017] 81 taxmann.com 153 (Gujarat) dissented with Punjab & Haryana High Court and held that only if the notices are issued before reasonable time of the prescribed period of limitation and it has been dispatched /sent for delivery within the reasonable time, in that case, there can be presumption under Section 27 of the General Clauses Act that it has been “served”. Otherwise the word “serve” and “issue” will not have the same meaning.

Suggestions : It is suggested to submit a reply within the time given in the notice to avoid any consequences of late filing of reply.

How to reply to the Notice of Mismatch in GST Return

As per Rule 99(2) of the CGST Rules, 2017 :- 

The registered person may accept the discrepancy mentioned in the notice issued under Rule 99(1) of the CGST Rules, 2017, and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy in FORM GST ASMT-11 to the proper officer.

Comment

FORM GST ASMT-11  is to be filed to Reply to the notice issued  under Section 61 of CGST Act 2017  intimating discrepancies in the return

If explanation for mismatch in GST returns is acceptable

In case the explanation is found acceptable, the registered person shall be informed accordingly and no further action shall be taken in this regard. [ Section 61(2) of CGST Act 2017 Scrutiny of returns. ]

Where the explanation furnished by the registered person or the information submitted under Rule 99(2) of the CGST Rules, 2017 is found to be acceptable, the proper officer shall inform him accordingly in FORM GST ASMT-12. [ Rule 99(3) of the CGST Rules, 2017]

Comment :

FORM GST ASMT-12 is the Order of acceptance of reply against the notice issued  under Section 61 of CGST Act 2017

If explanation for mismatch in GST returns is Not acceptable

Section 61(3) of CGST Act 2017 Scrutiny of returns. :-

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 registered 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 65.( Audit by tax authorities.) or
• Section 66. (Special audit ) or
• Section 67 (Power of inspection, search and seizure.), or
• Proceed to determine the tax and other dues under Section 73 . (Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful misstatement or suppression of facts) or
• proceed to determine the tax and other dues under Section 74.( Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts)

Copy of Relevant forms to Reply Notice of Mismatch in GST returns

Form GST ASMT-10

[See Rule 99(1) of the CGST Rules, 2017]

Notice for intimating discrepancies in the return after scrutiny

Reference No. :          Date:

To ___________

GSTIN :

Name :

Address :

Tax period -        F.Y. –

Notice for intimating discrepancies in the return after scrutiny

This is to inform that during scrutiny of the return for the tax period referred to above, the following discrepancies have been noticed :

<< text >>

You are hereby directed to explain the reasons for the aforesaid discrepancies by __________________ (date). If no explanation is received by the aforesaid date, it will be presumed that you have nothing to say in the matter and proceedings in accordance with law may be initiated against you without making any further reference to you in this regard.

 

	Signature
	Name
	Designation

Form GST ASMT-11

[See Rule 99(2) of the CGST Rules, 2017]

Reply to the notice issued  under Section 61 intimating discrepancies in the return

 

1. GSTIN
2. Name
3. Details of the notice		Reference No.		Date
4. Tax Period
5. Reply to the discrepancies
Sr. No.	Discrepancy		Reply

6. Amount admitted and paid, if any –

Act	Tax	Interest	Others	Total

7. Verification –

I __________________________________________ hereby solemnly affirm and declare that the information given hereinabove is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom.

 

Signature of Authorised Signatory
Name
Designation/Status –
Date –

Form GST ASMT-12

[See Rule 99(3) of the CGST Rules, 2017]

Order of acceptance of reply against the notice issued  under Section 61

Reference No.:       Date:

To

GSTIN

Name

Address

	Tax period –	F.Y. –
	ARN –	Date –

Order of acceptance of reply against the notice issued under section 61

This has reference to your reply dated _______________ in response to the notice issued vide reference no. ________ dated ___________. Your reply has been found to be satisfactory and no further action is required to be taken in the matter.

 

	Signature
	Name
	Designation

Topic wise Commentary on GST Act of India

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