ASMT-10
What exactly is ASMT-10?
ASMT-10 is a form through which scrutiny notice is issued by tax authorities to taxpayers whenever inconsistencies or discrepancies are identified in their filed GST returns (GSTR 1 & GSTR 3B). This form acts as an official means of communication, informing the taxpayer about the identified issues and allowing them to clarify or correct any errors.
What’s the importance of GST ASMT-10 for taxpayers?
As per Section 61 of the CGST Act, 2017, and Rule 99 of the CGST Rules, 2017, GST officers have the authority to scrutinize returns based on specific risk factors. Taxpayers must grasp the significance of GST ASMT-10 to comply with regulations and promptly resolve any issues detected in their returns.
Why do tax authorities issue form GST ASMT-10?
Tax authorities may issue a GST ASMT-10 notice to a taxpayer for various reasons:
- Discrepancy in Input Tax Credit (ITC): Mismatch between the ITC shown in auto-populated data like GSTR-2B and the ITC claimed in self-declared GSTR-3B.
- Discrepancy in Tax Liability: There’s a variance between the tax liability reported in outward supplies (GSTR-1) and self-assessed tax liability (GSTR-3B).
- Non-filing or Late Filing of Returns: Failure to file GST returns or delayed submission.
- Discrepancy between E-Way Bill and GSTR-3B: Difference between the invoice details reported in the E-Way Bill system and the details declared in GSTR-3B.
- Purchases from Cancelled or Suspended Dealers: Buying from a dealer whose GST registration has been retrospectively canceled or suspended.
- Suspected Fake or Bogus Dealers: Purchases from dealers suspected to be fake or bogus could lead to tax authorities.
How to Respond to ASMT-10?
As per Section 61 of the CGST Act, the taxpayer shall file a reply within 30 days of being informed i.e. 30 days from the date of receipt of notice. However, the GST Form ASMT-10 itself mentions the date by which the reply should be filed.
Here are the steps based on different scenarios:
- Agreement with Discrepancies:
– Settle the tax amount and interest in GST ASMT-10.
– File Form DRC-03 for payment, ensuring correct section selection.
– Payment can be made via unutilized ITC or in cash.
– Notify the tax officer by replying in Form GST ASMT-11 and provide a copy of GST DRC-03 as proof of payment.
- Disagreement with Discrepancies:
– Reply in Form GST ASMT-11, elucidating reasons for disagreement with detailed explanations backed by relevant provisions, rules circulars, case laws, etc, and supporting documents like GST returns, certificates, invoices, receipts, and bank statements.
What Happens After Reply Submission?
If the tax officer finds your response satisfactory:
– They will issue GST ASMT-12, confirming acceptance of your reply, and terminate proceedings.
If the tax officer is unsatisfied:
– Further actions may be taken, such as initiating appropriate measures under sections 65, 66, or 67, or determining tax and other dues under sections 73 or 74, as per the officer’s discretion.
What is the time limit to issue a notice under Sections 73 and 74?
|
Time limit |
Notice under section 73 |
Notice under section 74 |
|
Payment of tax and interest before issuance of an adjudication notice |
The entire penalty is not payable (i.e. NIL penalty) |
A penalty equal to 15% of the tax amount is payable |
|
Payment of tax and interest within 30 days of issuance of an adjudication notice |
The entire penalty is not payable (i.e. NIL penalty) |
A penalty equal to 25% of the tax amount is payable |
|
Payment of tax and interest after the issuance of an adjudication order |
A penalty equal to higher of the following amount is payable – 10% of tax or Rs. 10,000 |
A penalty equal to 50% of the tax amount is payable |
As per Section 73, the GST authority is required to issue the show-cause notice 3 months before the given time limit, i.e. 3 years from the last date for filing annual returns for the fiscal year to which the amount/discrepancy relates. So technically, the notice has to be issued within 2 years and 9 months from the date on which the annual return was filed.
As per Section 74, the GST officer is required to issue the notice 6 months before the time limit i.e. 5 years from the last date for filing annual returns for the relevant fiscal year. The officer is also required to issue an order of adjudication within the given time of 5 years. So technically, the notice has to be issued within 4 years and 6 months from the date on which the annual return was filed.
Conclusion
Taxpayers must act promptly and address any issues found. They should maintain proper documentation and adhere to regulatory guidelines. Open communication with the tax authorities, backed by supporting evidence and following the prescribed timelines, is vital. By actively participating in the process and showing a commitment to resolving discrepancies, taxpayers can minimize penalties and prevent further legal actions. Responding promptly and cooperating can lead to positive results, ensuring compliance while avoiding unnecessary penalties and legal issues.
