GST Scrutiny: Data Mismatches may triggers GST Notice under Automated Scrutiny

The Central Board of Indirect Taxes and Customs (CBIC) this week launched out an automated inspection module for Goods and Services Tax (GST) reports, which might result in assessees receiving notices if there are differences between different types of tax returns.

The Automated Return scrutiny Module was recently introduced in the backend of the ACES-GST Application for Central Tax Officers for automated inspection of Goods and Services Tax (GST) Returns.

Data from several returns is correlated to find inconsistencies. The Union Minister for Finance and Corporate Affairs had asked the CBIC to put in place the module, which is now being used to review GST filings for financial year 2019-20.

The technology enables tax authorities to scrutinise Centre Administered Taxpayers’ GST returns using data analytics and identified risks, allowing them to communicate with taxpayers via the GSTN Common Portal to address any problems. To verify compliance, this system can issue an order of acceptance in FORM ASMT-12, a show cause notice, or launch an audit/investigation.

The Finance Minister had requested that the CBIC perform a thorough root cause study of fraud cases and suggest technology-based remedies to avoid future recurrence. The new returns inspection system intends to improve tax compliance, eliminate manual involvement, and boost tax administration efficiency. Furthermore, the FM advised organising contacts with members of trade and industry in the GST ecosystem to continuously improve taxpayer services.

The goal of this module is to allow tax officials to examine GST returns submitted by Centre Administered Taxpayers based on data analytics and identified hazards. The module offers a process for tax officers to interface with taxpayers via the GSTN Common Portal, conveying differences using FORM ASMT-10, and receiving the taxpayer’s response via FORM ASMT-11.

It also provides for future action, such as issuing an order of acceptance in FORM ASMT-12, issuing a show cause notice, or commencing an audit/investigation. The Automated Return Scrutiny Module is presently being deployed for the examination of GST returns for financial year 2019-20, with the required data already available on officers’ dashboards.

New returns inspection system would create alerts for taxpayers very soon based on linked data from numerous GST filings to find any discrepancies.

The new automated GST Returns Scrutiny System automates the auditing of GST returns and produces notifications in situations of noncompliance. This technology-based approach attempts to improve tax compliance, eliminate manual involvement, and boost tax administration efficiency.