Scrutiny of returns – A weapon to the department
Department v/s Tax evaders-scrutiny
Goods and Services Tax (GST) which was introduced with the aim of?“One Nation, One Tax, One Market”,?has evolved over the years and has become an effective and efficient tax collection tool that aids the government to regulate inter/intra-state movement of goods/services, fight against corruption and above all it provides the procedure of self-assessment to registered persons thereby facilitating easy compliance, timely filing of returns and payment of taxes.
Therefore, taxpayers must comply with all the applicable provisions of GST ACT and if any contravention will be there, the demand notice will be served by the department.
Ever since the GST has come into force, registered persons have filled many returns. They struggled a lot to file the returns in a timely as there were endless issues that everybody faced while filing the returns and submitting the data on an online portal i.e.,?www.gst.gov.in,?as it was upgrading itself in the initial stage of implementation. But as there was no cross-examining from the department primarily, all were at ease that whatever was filed had been accepted. But now is the time to pull up our socks and be ready to face the multiple queries that the departmental officials are likely to raise as for the first time the task of scrutinizing is likely to begin.
To verify the correctness and authenticity of returns, the?Central Board of Indirect Taxes & Customs (CBIC)?on 10th April’2022, has rolled out a?computer-assisted?automated selection of GST returns for scrutiny which will be based on certain?risk-based parameters?(including claiming of Input Tax Credit). With the use of Artificial Intelligence (AI) and Data Analytics (DA) technology, the department will make sure to thoroughly examine and scrutinize the returns to detect any tax evasion.
To make it functional, CBIC has also issued SOPs (standard operating procedure) vide Instruction No. 02/2022-GST, dated 22 March’2022, to streamline the scrutiny process of GST returns for financial years 2017-18 and 2018-19. It contains:
Directorate General of Analytics and Risk Management (DGARM)?has been assigned with the responsibility of selection of returns for scrutiny and in case any discrepancies are found in the process, a notice shall be served by the department to the taxpayers specifying the amount of tax, interest, and any other amount payable. The SOP has instructed the proper officers to conduct the scrutiny of returns about a minimum of 3 GSTINs per month. Scrutiny of returns of one GSTIN shall mean scrutiny of all returns about the financial year for which the said GSTIN has been identified for scrutiny.
The prime aim is to keep the interface between the department and taxpayer minimal and help both the department and registered person to ensure that fraudulent activities are kept at bay and at the same time the scrutiny is completed by the tax officers within a given timeframe.
To make businesses free from any kind of litigation we need to keep a regular check on all the statutory provisions applicable by reconciling the outward supplies in books with GST returns and input credit reflected in GSTR-2B with the input claimed in books. So, businesses are required to be extra careful in filing accurate returns and need to ensure that GST data must be reconciled before filing returns on the portal as the government is working hard to improve compliance and scrutinize the returns as it would be a key focus to plug in any revenue leakages.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise.?AKGVG & Associates?does not intend to advertise its services through this.
Posted by
CA Tarun Kapoor
AKGVG & Associate