Scrutiny of returns under GST

Verifying the correctness of the return 

The return furnished by a registered person may be selected for scrutiny by a proper officer to verify its correctness. Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same with reference to the information available with him.

Issue of notice 

In case any discrepancy is found during scrutiny of return, the proper officer shall issue a notice to the said person informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding 30 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.

Reply to notice 

The registered person to whom notice is issued may – 

  1. accept the discrepancy as mentioned in the notice and pay the tax, interest and any other amount arising from such discrepancy and inform the same or furnish an explanation for the discrepancy to the proper officer or 
  2. submit his explanation regarding non-acceptance of discrepancy within a period of 30 days of being informed by the proper officer or such further period as may be permitted by him. 

Action by Proper Officer 

Where the explanation furnished by the registered person or the information submitted is found to be acceptable, the proper officer shall inform him accordingly and no further action shall be taken in this regard. 

In case no satisfactory explanation is furnished by the registered person 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 take recourse to any of the following provisions, namely:

(a) proceed to conduct an audit under section 65 of the Act.

(b) direct the conduct of a special audit under section 66 which is to be conducted by a Chartered Accountant or a Cost Accountant nominated for this purpose by the Commissioner.

(c) undertake procedures of inspection, search, and seizure under section 67 of the Act.

(d) initiate a proceeding for determination of tax and other dues under Section 73 or 74 of the Act. 

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