Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B

GST scrutiny notices have become increasingly common as authorities leverage advanced analytics and automated return-matching to ensure compliance. These notices are typically issued when discrepancies are detected between GSTR-1 (which reports outward supplies) and GSTR-3B (the summary return showing taxable value, tax liability, and ITC claims), or when Input Tax Credit (ITC) claims appear suspicious.

Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B, Get Practical GST Course in Delhi, 110058, by SLA Consultants India, New Delhi,

What Triggers a GST Scrutiny Notice?

Mismatch Between GSTR-1 and GSTR-3B:
The most frequent trigger is a mismatch in sales figures or tax liability reported in GSTR-1 versus GSTR-3B. For instance, if sales of ₹10 lakh are reported in GSTR-1 but only ₹7 lakh in GSTR-3B, the system flags this as under-reporting. Such discrepancies may arise from clerical errors, incorrect section reporting, or intentional misreporting, and are now promptly auto-flagged by AI-based analytics.
ITC Claim Discrepancies:
Claiming ITC in GSTR-3B that does not match the eligible ITC reflected in GSTR-2B (auto-populated from supplier filings) is another major reason for scrutiny. This may result from suppliers not filing their GSTR-1, uploading incorrect details, or the recipient claiming ineligible ITC.
Abnormally High ITC Claims:
If the ITC claimed is disproportionately high compared to turnover or industry norms, authorities may issue a notice to verify the legitimacy of the claim. GST Course in Delhi

Nature and Format of Scrutiny Notices

Form ASMT-10 or DRC-01:
Notices for mismatches are commonly issued in Form ASMT-10 or DRC-01, requiring the taxpayer to explain discrepancies and, if necessary, pay the differential tax along with interest and penalties.
Section 61 of CGST Act:
Scrutiny is conducted under Section 61, empowering officers to examine returns and seek explanations or additional documents.

Responding to a GST Scrutiny Notice

Timely and Detailed Response:
Taxpayers must respond within the stipulated timeline, providing explanations, reconciliations, and supporting documents (like invoices and books of accounts).
Rectification:
If errors are found, taxpayers should promptly correct them in subsequent returns (e.g., through GSTR-1A or amendments in GSTR-1/GSTR-3B).
Payment of Dues:
If the notice finds merit, pay any tax shortfall with applicable interest and penalties to avoid further legal action.

Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B, Get Practical GST Course in Delhi, 110058, by SLA Consultants India, New Delhi,

Best Practices to Avoid Scrutiny Notices

Regular Reconciliation:
Routinely match GSTR-1, GSTR-3B, and GSTR-2B figures before filing returns.
Accurate Data Entry:
Double-check all entries and ensure that sales, tax liabilities, and ITC claims are consistent across returns.
Supplier Coordination:
Ensure your suppliers file correct and timely GSTR-1 returns to avoid ITC mismatches.

Get Practical GST Course in Delhi, 110058, by SLA Consultants India

SLA Consultants India offers a comprehensive, practical GST training program in Delhi, including the 110058 area, ideal for professionals and graduates seeking expertise in GST compliance and handling scrutiny notices9.

Course Highlights:

In-depth Curriculum: Covers GST registration, GSTR-1/3B filing, ITC reconciliation, scrutiny notice handling, and real-world case studies.
Hands-on Training: Practical assignments, live projects, and GST software usage for real-time learning.
Expert Faculty: Sessions led by experienced Chartered Accountants and GST practitioners.
Flexible Batches: Classroom and online options, with weekday and weekend schedules.
Placement Assistance: 100% job placement support, including interview preparation and referrals.
Eligibility: Suitable for graduates, postgraduates, and working professionals in accounts, finance, and taxation.