GST Scrutiny Notice Reply: How to Respond Effectively

A GST scrutiny notice in Form ASMT-10 indicates that the tax department has identified discrepancies in your GST returns that require clarification. Having guided over 500 businesses through GST scrutiny proceedings in my practice, I can confirm that a well-prepared, documented response resolves most scrutiny cases without any adverse order.

This comprehensive guide covers everything you need to know about responding to GST scrutiny notices effectively.

What is a GST Scrutiny Notice?

A GST scrutiny notice is issued under Section 61 of the CGST Act, 2017 when the Proper Officer detects discrepancies during examination of GST returns. The notice is issued in Form GST ASMT-10 and requires a response in Form GST ASMT-11 within 30 days.

Key Characteristics of Scrutiny Notice

• Non-adversarial: Scrutiny is not an accusation but a request for clarification
• Preliminary stage: Comes before formal demand proceedings under Section 73/74
• Response timeline: 30 days from date of notice (extendable on request)
• Response form: GST ASMT-11
• Resolution: If response is satisfactory, proceedings are dropped via ASMT-12

Common Reasons for GST Scrutiny

The GST system automatically flags discrepancies. Common triggers include:

Step-by-Step Guide to Reply to GST Scrutiny Notice

Step 1: Download and Analyze the Notice

Access the notice on GST portal:

1. Login to gst.gov.in
2. Navigate to Services then User Services then View Additional Notices/Orders
3. Download Form ASMT-10
4. Note the specific discrepancies mentioned para-wise
5. Check response deadline (typically 30 days)

Step 2: Identify Each Discrepancy

For each issue raised, determine:

• Is the discrepancy factually correct? Sometimes system comparisons have errors
• What is the actual position? Verify from your records
• What caused the discrepancy? Timing difference, amendment, error in return
• What evidence supports your position? Invoices, ledgers, bank statements

Step 3: Prepare Supporting Documentation

Compile comprehensive evidence based on discrepancy type:

For GSTR-1 vs GSTR-3B Mismatch:

• Month-wise reconciliation statement
• Credit/debit notes issued
• Amended invoices with reasons
• Sales register matching with returns

For ITC Mismatch:

• GSTR-2A/2B download for the period
• Purchase register with invoice-wise details
• Supplier communication for missing invoices
• Evidence of ITC reversal for ineligible credits

For E-way Bill Mismatch:

• E-way bill portal download
• Delivery challans and transport documents
• Explanation for consolidated shipments
• Vehicle tracking records if available

Step 4: Draft Your Response in Form ASMT-11

Structure your reply systematically:

1. Acknowledgment: Confirm receipt of notice with reference details
2. Para-wise reply: Address each discrepancy separately
3. Reconciliation: Provide numerical reconciliation where applicable
4. Evidence reference: Cite specific annexures for each point
5. Declaration: Undertaking that information is true and correct

Step 5: Submit Response on GST Portal

1. Login to GST portal
2. Go to Services then User Services then My Applications
3. Search for the scrutiny notice reference
4. Click File Reply (ASMT-11)
5. Enter para-wise explanation in text fields
6. Upload supporting documents (PDF, max 5MB each)
7. Preview and submit with DSC/EVC
8. Download acknowledgment

Step 6: Follow Up

After submission:

• Track status under View Additional Notices
• Respond to any further queries within 15 days
• If personal hearing scheduled, attend with all documents
• Await ASMT-12 (acceptance) or DRC-01 (if not accepted)

Sample Reply to GST Scrutiny Notice (ASMT-10)

FORM GST ASMT-11
[Reply to Notice for Scrutiny]

To,
The Proper Officer,
[GST Jurisdiction - Ward/Circle/Division]
[Address]

Subject: Reply to Scrutiny Notice in Form ASMT-10

Reference:
- Notice No.: ASMT10/[State Code]/[Reference Number]
- Notice Date: [DD/MM/YYYY]
- GSTIN: [Your 15-digit GSTIN]
- Legal Name: [Registered Business Name]
- Trade Name: [If different]
- Tax Period under Scrutiny: [Month/Year or FY]

Respected Sir/Madam,

With reference to the above-mentioned scrutiny notice, I hereby submit my point-wise reply for the discrepancies noted:

DISCREPANCY 1: Mismatch between GSTR-1 and GSTR-3B
As per Notice: Outward supplies in GSTR-1 Rs. 50,00,000 vs GSTR-3B Rs. 48,50,000. Difference: Rs. 1,50,000

Our Reply:
The difference of Rs. 1,50,000 is reconciled as under:

a) Credit notes issued in October 2025 for returns received: Rs. 80,000
   (Credit notes CN/2025-26/45 to CN/2025-26/52 - Annexure A)

b) Amendment of invoices from earlier period: Rs. 70,000
   (Amendment Table 9 of GSTR-1 October 2025 - Annexure B)

Reconciliation Statement enclosed as Annexure C.

DISCREPANCY 2: ITC claimed in GSTR-3B exceeds GSTR-2B
As per Notice: ITC claimed Rs. 4,50,000 vs GSTR-2B Rs. 4,20,000. Excess: Rs. 30,000

Our Reply:
The excess ITC of Rs. 30,000 comprises:

a) ITC on invoices uploaded by suppliers in subsequent months: Rs. 22,000
   (Now reflecting in GSTR-2B of Nov/Dec 2025 - Annexure D)

b) ITC on RCM paid for legal services: Rs. 8,000
   (RCM not reflected in GSTR-2B. Invoice and payment proof - Annexure E)

We have not claimed any ITC beyond our legitimate entitlement.

PRAYER:
In view of the above explanations and supporting documents, we humbly request your good office to accept our reply and close the scrutiny proceedings by issuing Form ASMT-12.

UNDERTAKING:
I hereby declare that the information provided above is true and correct to the best of my knowledge and belief. If any information is found to be incorrect, I shall be liable for action under the GST law.

Date: [DD/MM/YYYY]
Place: [City]

[Authorized Signatory]
[Name]: _______________
[Designation]: _______________
GSTIN: [Your GSTIN]

List of Annexures:
Annexure A: Credit notes issued
Annexure B: Amendment details from GSTR-1
Annexure C: Reconciliation statement
Annexure D: GSTR-2B for Nov-Dec 2025
Annexure E: RCM invoice and payment proof

Common Mistakes to Avoid

1. Generic responses: Avoid vague explanations like general business practice. Be specific with amounts, invoice numbers, and dates.
2. Missing annexures: Every claim must be supported by documentary evidence. Missing documents weaken your case significantly.
3. Inconsistent figures: Ensure reconciliation statements add up correctly. Mathematical errors create credibility issues.
4. Delayed response: Missing the 30-day deadline can result in proceedings advancing to show cause notice stage under Section 73/74.
5. Ignoring follow-up queries: If the officer asks for additional clarification, respond within 15 days.
6. Not seeking adjournment when needed: If you need more time for complex reconciliation, file for extension before deadline expires.

What Happens After Filing Reply?

Three possible outcomes:

1. ASMT-12 (Acceptance): If the Proper Officer is satisfied with your explanation, proceedings are dropped. You receive Form ASMT-12 confirming no further action required.
2. Further Clarification: Officer may seek additional information. Respond within the timeline specified.
3. Show Cause Notice (DRC-01): If explanation is not accepted, proceedings move to demand determination under Section 73 (non-fraud) or Section 74 (fraud cases).

Frequently Asked Questions

1. What is the time limit for GST scrutiny?

There is no specific time limit for initiating scrutiny. However, the time limit for issuing demand notice under Section 73 is within 3 years from the due date of annual return. For Section 74 (fraud cases), it is 5 years. Scrutiny is typically initiated within 1-2 years of the relevant financial year.

2. Can I file a revised response after submitting ASMT-11?

Yes, you can file additional submissions or revised explanations before the proceedings are closed. Use the My Applications section to add further documents or clarifications. However, it is best to file a comprehensive response initially to avoid delays.

3. Is personal hearing mandatory in GST scrutiny?

Personal hearing is not mandatory at scrutiny stage. However, you have the right to request a hearing under Rule 142(5). If the officer is inclined to reject your explanation, they should ideally grant a hearing before issuing an adverse order. Video conferencing hearings are now common.

When to Seek Professional Help

Engage a GST consultant or CA when:

• Discrepancies exceed Rs. 5 lakh in a single year
• Multiple tax periods under scrutiny
• Complex transactions (exports, SEZ supplies, job work)
• ITC reversal issues involving significant amounts
• Scrutiny progressing towards show cause notice
• Classification or valuation disputes involved

Conclusion

GST scrutiny notices are an opportunity to clarify your position before formal demand proceedings. A well-documented, point-wise response addressing each discrepancy with supporting evidence typically results in favorable closure through ASMT-12.

If you have received a GST scrutiny notice and need expert assistance, our team of indirect tax specialists has extensive experience in handling scrutiny proceedings. Get professional GST scrutiny support to ensure proper compliance and resolution.

Disclaimer: This article provides general guidance on GST scrutiny. For specific situations, consult a qualified GST professional.