GST Scrutiny Notice in Form ASMT-10: How to Reply in the 30-Day Window

A scrutiny notice is procedural — not the end of the road

A Form GST ASMT-10 notice under Section 61 of the CGST Act is one of the more common — and most misunderstood — pieces of paper a GST-registered business receives. It is not an audit, it is not a show-cause notice, and it is not a demand. It is the proper officer's communication of a discrepancy noticed during scrutiny of returns, with a 30-day window for the taxpayer to either accept and pay, or to explain.

If you respond properly within the window, the matter typically closes with a Form ASMT-12 acceptance order. If you ignore it or reply poorly, the next step is usually a show-cause notice under Section 73 or 74 — and the cost rises sharply. This guide walks through the framework.

The Section 61 framework

Under Section 61, the proper officer may scrutinise the return furnished by a registered person and verify its correctness. Where any discrepancy is noticed, the procedure under Rule 99 of the CGST Rules, 2017 kicks in:

1. The officer issues a notice in Form GST ASMT-10, informing the discrepancy and seeking explanation within a time not exceeding thirty days from service.
2. The registered person may, in Form GST ASMT-11, either (a) accept the discrepancy and pay the tax, interest and any other amount, or (b) furnish an explanation with supporting documents.
3. If the explanation is acceptable, the officer issues Form GST ASMT-12 closing the matter (acceptance of the reply).
4. If the explanation is not acceptable — or no reply is filed — the officer may initiate audit under Section 65, special audit under Section 66, or proceedings under Sections 73 or 74 (recovery proceedings, with a show-cause notice).

The Standard Operating Procedure for scrutiny was prescribed by CBIC in Instruction No. 02/2022-GST dated 22 March 2022, and the scrutiny module on the GSTN portal was rolled out per the CBIC press note dated 11 May 2023. Both confirm the workflow above.

The most common discrepancies in ASMT-10

In practice, the discrepancies flagged in ASMT-10 cluster around a small number of recurring issues. Knowing which one your notice is raising tells you exactly what to attach in ASMT-11.

Mismatch between GSTR-3B and GSTR-1. Output tax declared in GSTR-3B is lower than the tax on outward supplies declared in GSTR-1. Reply: reconciliation statement, copy of GSTR-1 and 3B for the period, with explanation for genuine timing differences (e.g., credit notes issued late, advances) and payment of any genuine shortfall with interest.

ITC claimed in GSTR-3B that does not appear in GSTR-2A / 2B. This is the most frequent ASMT-10. CBIC's Circular No. 183/15/2022-GST clarified the procedure for verifying ITC in such cases, especially for periods before the auto-population rules tightened. Reply: invoice-wise schedule of the disputed credit, copies of tax invoices, proof of receipt of goods/services, proof of payment to vendor, and confirmation that the vendor has filed their return (where possible).

Difference between e-way bill data and outward supplies in GSTR-1. Reply: reconciliation between EWB data and GSTR-1, with explanation for cancellation, return, or job-work movements that were never sales.

Inward supplies covered by reverse charge that were not paid in cash. Many taxpayers mistakenly discharge RCM through ITC instead of in cash. Reply: pay the cash component with interest in DRC-03 and reply to ASMT-10 attaching the challan.

Composition scheme threshold crossed but registration not migrated. Reply: explain the position; if threshold was indeed crossed, regularise registration and pay tax difference.

Late filing or non-filing of GSTR-9 / 9C. Reply: reconciliation between GSTR-3B figures and the audited financials with explanation for differences.

How to draft a clean ASMT-11

A reply that closes the file typically has six elements:

1. Acknowledgement of the notice with ARN and date of service.
2. Tabular reconciliation of the discrepancy figure with your books and returns.
3. Supporting documents — invoices, GSTR-2A / 2B downloads, e-way bills, bank statements, vendor confirmations.
4. Legal position if the discrepancy is on an interpretive matter (e.g., place of supply, rate classification).
5. Payment via DRC-03 of any genuine shortfall with interest under Section 50, and acknowledgement reference in the reply.
6. Request for closure via ASMT-12.

Avoid two common mistakes: (a) replying with a one-line denial without documentation, and (b) accepting and paying everything just to close the file — overpayment of tax in an ASMT-11 is hard to recover.

What happens if you ignore ASMT-10

Inaction has a predictable escalation:

• Audit under Section 65 of the CGST Act — the proper officer can call for books and conduct a general audit on-site or at the office.
• Show-cause notice under Section 73 for ordinary recovery (3-year window) or Section 74 for fraud/willful misstatement (5-year window) — penalty is 10% of tax in Section 73, 100% in Section 74.
• Restriction on ITC / e-way bill generation in extreme cases.

The cost of replying properly is almost always a fraction of the cost of letting it become a 73/74 SCN.

When the discrepancy is genuine

If the notice has correctly identified a shortfall — most often a missed RCM in cash, or an ITC where the vendor didn't pay — the cleanest path is:

1. Pay the tax in cash via DRC-03 with interest at the prescribed rate under Section 50.
2. File ASMT-11 accepting the discrepancy and attaching the DRC-03 acknowledgement.
3. Receive ASMT-12 closing the matter.

Section 73 penalty does not apply where tax is paid before issuance of an SCN (Section 73(5)), so timely acceptance avoids penalty entirely.

When the discrepancy is wrong

Just as often, the notice is mechanical — the system has flagged a difference that has a perfectly clean explanation (a credit note, a return of goods, a timing difference). Reply with the reconciliation and documentary proof. The officer is generally receptive when the working is laid out clearly.

Building a scrutiny-proof return regime

Most ASMT-10s are preventable by three habits in your monthly compliance:

• Reconcile GSTR-3B output with GSTR-1 before filing each month.
• Reconcile ITC claimed in 3B with GSTR-2B; do not claim ITC that is not auto-populated unless the vendor confirms invoice upload.
• Discharge RCM in cash every month, not by adjustment against ITC.

For GST registration mechanics and threshold questions that often sit alongside scrutiny issues, see our GST Registration Guide 2026; for the broader business-classification issues, see our existing piece on the three structural GST mistakes that trigger scrutiny.

Pune note: we draft ASMT-11 replies the same week

At RDA Tax Advisory Services, Baner, GST scrutiny notices are one of our most frequent same-week deliverables. For Pune businesses — manufacturers in Bhosari, traders in Camp, IT consultants in Hinjewadi crossing the GST threshold — we read the ASMT-10, identify which of the standard discrepancy buckets applies, build the reconciliation, draft the ASMT-11 with documents, and where genuine shortfall exists, prepare the DRC-03 challan for the cash component plus interest under Section 50. Most of our clients receive an ASMT-12 closure within the same financial quarter. Office No. 102, Snehraj Apartment, Baner, Pune 411045 · call +91 77570 45059.

Forward your ASMT-10 — we'll reply the same week

Got a GST scrutiny notice in Pune? Forward it on WhatsApp; we draft the ASMT-11 reply, prepare the DRC-03 where required, and close the file within the 30-day window before it escalates to a 73/74 SCN. Book a notice consult at rdatax.in or call +91 77570 45059 — RDA Tax Advisory Services, Baner, Pune.

Verification note: Material legal positions in this article — Section 61 CGST Act on scrutiny of returns, Rule 99 CGST Rules on the ASMT-10 / 11 / 12 procedure, the 30-day reply window for ASMT-10, the routes to audit under Section 65 / SCN under Section 73 or 74 on inaction, the no-penalty provision under Section 73(5) for pre-SCN payment, the GST SOP for scrutiny in CBIC Instruction 02/2022-GST dated 22 March 2022, ITC verification under Circular 183/15/2022-GST, and the rollout of the scrutiny module per the CBIC press note dated 11 May 2023 — are sourced from the CBIC tax-information portal and the CBIC website. Confirm specific replies with your CA before filing.