Indirect Tax Laws · Returns

Scrutiny of Returns and Notice to Non-Filers under GST

Updated 5 October 2026 · Fact-checked

Scrutiny of returns lets the proper officer check a filed return under Section 61. If he finds discrepancies, he issues ASMT-10 under Rule 99. You accept and pay, or explain in ASMT-11, and he closes the matter in ASMT-12 if satisfied. For non-filers, a Rule 68 notice in GSTR-3A comes first, then best judgment assessment under Section 62.

Understand Scrutiny of Returns and Notice to Non-Filers

Two different situations sit in this topic. In the first, you have filed your return, but the officer doubts it. In the second, you have not filed at all. The law gives a separate route for each.

Scrutiny (Section 61) is a desk check. The proper officer compares the return and related particulars (for example GSTR-1 against GSTR-3B, or the auto-drafted ITC statement against ITC claimed) to verify correctness. It is not an audit and not a search. No visit to your premises is needed. If he sees a mismatch, he informs you of the discrepancy and asks for an explanation. This is done through Form GST ASMT-10 under Rule 99.

You then have choices. You can accept the discrepancy, pay the tax, interest and any other amount arising from it, and inform the officer. Or you can explain why there is no discrepancy. Both replies go in Form GST ASMT-11. If the officer finds your explanation acceptable, he informs you in Form GST ASMT-12 and takes no further action. If you give no satisfactory explanation within 30 days of being informed (or the extended period he allows), or you accept the discrepancy but do not correct it in the return for the month in which you accepted it, he may initiate appropriate action. That includes audit (Section 65), special audit (Section 66), inspection or search (Section 67), or determination of tax under the demand provisions.

Non-filers (Sections 46 and 62) are handled in two stages. First, the officer serves a notice under Section 46 in Form GSTR-3A (Rule 68), asking you to file the return within 15 days. If you still do not file, the officer may assess your liability to the best of his judgment, using all relevant material available or gathered. This is the Section 62 assessment, and the order is issued in Form GST ASMT-13.

The Section 62 order is not final if you act fast. Under Section 62(2), if you file a valid return within 30 days of service of the assessment order, the order is deemed withdrawn. But interest under Section 50(1) and late fee under Section 47 still have to be paid. Unregistered persons who should have registered are dealt with separately under Section 63.

Key rules to remember

Scrutiny of returns: Section 61: proper officer verifies return and particulars → informs discrepancy → seeks explanation; Desk verification only. The notice is issued in Form GST ASMT-10 under Rule 99(1).
Taxpayer's reply options: Accept and pay tax, interest and other amount, OR furnish explanation → Form GST ASMT-11; Rule 99(2). If you accept, correct the return for the month in which the discrepancy is accepted.
Acceptance of reply: Explanation acceptable → Form GST ASMT-12 → no further action; Rule 99(3). The officer informs you in writing that the matter is closed.
Time to explain: 30 days from being informed, or further period permitted by the officer; Failure allows action under Sections 65, 66, 67 or determination of tax under the demand provisions.
Notice to return defaulters: Section 46 + Rule 68: notice in Form GSTR-3A, return to be filed within 15 days; Issued electronically to a registered person who has not filed a return.
Assessment of non-filers: Section 62(1): best judgment assessment after the Section 46 notice is ignored; The officer uses all relevant material available or gathered. The order is issued in Form GST ASMT-13.
Withdrawal of non-filer assessment: Section 62(2): valid return within 30 days of service of the assessment order → order deemed withdrawn; Interest under Section 50(1) and late fee under Section 47 continue to be payable.

How to solve Scrutiny of Returns and Notice to Non-Filers questions

Use this order for any question on scrutiny or non-filer assessment. First decide whether the person has filed or not.

1Identify the trigger. A filed return with a mismatch points to Section 61 and Rule 99. A missing return points to Section 46 (Rule 68) and Section 62.
2For scrutiny, state who acts and how. The proper officer scrutinises the return and issues ASMT-10 stating the discrepancies and asking for an explanation.
3State the taxpayer's options: accept and pay tax, interest and other amount, or explain. The reply goes in ASMT-11.
4Check the time limit. The explanation is due within 30 days of being informed, or the extended period allowed by the officer.
5Give the outcome. If the explanation is acceptable, the officer informs the taxpayer in ASMT-12 and drops the matter. If not, he may go for audit, special audit, inspection or search, or a demand.
6For non-filers, narrate the sequence: GSTR-3A notice with 15 days, then best judgment assessment under Section 62 on available material.
7Check the relief. Under Section 62(2), a valid return within 30 days of service of the assessment order deems the order withdrawn, but interest and late fee remain.
8Close with a one-line conclusion tied to the facts, in provision-facts-conclusion form.

Quickest way: Filed or not filed: two-track check

When to use it: Use this for case-scenario MCQs and short written answers when you have only a few minutes.

Ask: was a return filed? Yes means Section 61 and Rule 99. No means Rule 68 and Section 62.
Match forms: ASMT-10 is the officer's notice, ASMT-11 is your reply, ASMT-12 is the officer's acceptance. GSTR-3A is the non-filer notice.
Match numbers: 30 days for the scrutiny explanation, 15 days in GSTR-3A, 30 days after service of the assessment order to file a valid return.
Check the end point. Scrutiny can lead to Sections 65, 66, 67 or demand. Assessment under Section 62 is deemed withdrawn on a valid return filed in time, but interest and late fee stay.
Write the conclusion in one sentence with the dates from the facts.

Common mistakes in Scrutiny of Returns and Notice to Non-Filers

Treating ASMT-10 as a demand notice or show cause notice.
Students see the word notice and assume tax is already being demanded.
Fix: ASMT-10 only points out discrepancies and asks for an explanation. Demand follows later, under the demand provisions, only if the reply is unsatisfactory.
Mixing up the forms: saying the taxpayer replies in ASMT-12.
The three forms have similar numbers and are learnt as a list.
Fix: Remember the sequence: 10 is the notice, 11 is your reply, 12 is the officer's acceptance.
Saying the officer can visit premises or seize goods during scrutiny.
Scrutiny is confused with audit and inspection.
Fix: Scrutiny is a verification of the return and particulars. Audit, special audit and search are separate steps the officer may take only if the explanation is not satisfactory.
Saying the Section 62 assessment order is withdrawn with no further liability once a return is filed.
Students remember the withdrawal but forget the proviso on interest and late fee.
Fix: Always add that interest under Section 50(1) and late fee under Section 47 continue to be payable.
Jumping to Section 62 assessment without the GSTR-3A notice.
Students focus on the assessment and skip the Section 46 step.
Fix: The assessment applies when the person fails to file even after service of the Section 46 notice. Mention Rule 68 and the 15 days first.
Applying Section 62 to an unregistered person.
Both provisions deal with persons who did not comply.
Fix: Section 62 is for registered persons who fail to file returns. Unregistered persons who should have registered fall under Section 63.

Worked examples

Example 1

Case: Kavya Traders, registered in Maharashtra, supplies goods only within the State at 18% GST. The proper officer scrutinises its return for a month. GSTR-1 shows taxable outward supplies of ₹12,00,000. GSTR-3B shows taxable outward supplies of ₹10,00,000. The officer issues ASMT-10. Explain the process and the tax difference if the discrepancy is genuine.

Show the solution

Provision: Under Section 61, the proper officer may scrutinise a return and related particulars to verify correctness. Under Rule 99(1), he informs the registered person of the discrepancy in Form ASMT-10 and seeks an explanation.
Facts: The difference in taxable value is ₹12,00,000 − ₹10,00,000 = ₹2,00,000. Tax at 18% is ₹36,000, which is CGST ₹18,000 and SGST ₹18,000 since the supply is intra-State.
Option 1: If the mismatch is genuine, Kavya Traders may accept it, pay the ₹36,000 tax with interest and any other amount, and inform the officer in Form ASMT-11. It should also correct this in the return for the month in which it accepts the discrepancy.
Option 2: If there is a valid reason (for example, ₹2,00,000 was reported by mistake in GSTR-1), it may furnish that explanation in ASMT-11 within 30 days of being informed, or the extended period allowed.
Outcome: If the officer finds the reply acceptable, he informs it in Form ASMT-12 and takes no further action. If not, or if the corrective step is not taken, he may initiate audit, special audit, inspection or search, or determine tax under the demand provisions.

Answer: The discrepancy is ₹2,00,000 in taxable value, with tax of ₹36,000 (CGST ₹18,000 and SGST ₹18,000). Kavya Traders replies in ASMT-11 by paying with interest or by explaining. If the explanation is acceptable, the officer closes the matter through ASMT-12.

Example 2

Case: Rohan Enterprises, a registered person, did not file its GSTR-3B for a tax period. The officer served a notice in Form GSTR-3A. Rohan ignored it. The officer assessed the liability on best judgment, and the order was served on 10 September. Rohan filed a valid return on 5 October. Examine the position.

Show the solution

Provision: Under Section 46 and Rule 68, the officer issues notice in Form GSTR-3A requiring the return to be filed within 15 days. If the person still does not file, Section 62(1) lets the officer assess the tax to the best of his judgment, using all relevant material available or gathered.
Facts: Rohan ignored the GSTR-3A notice, so the Section 62 assessment is valid. The assessment order was served on 10 September.
Relief: Under Section 62(2), a valid return filed within 30 days of service of the assessment order leads to deemed withdrawal of the order. Thirty days from 10 September ends on 10 October. Rohan filed on 5 October, which is within time.
Consequence: The assessment order is deemed withdrawn. However, Rohan must still pay interest under Section 50(1) on the tax paid late and the late fee under Section 47.

Answer: The assessment order is deemed withdrawn because Rohan filed a valid return within 30 days of service of the order. Interest under Section 50(1) and late fee under Section 47 remain payable.

Exam tips

Learn the form sequence ASMT-10, ASMT-11, ASMT-12 and GSTR-3A as a set. MCQs often test only the form name or who files it.
Write answers in provision-facts-conclusion form. Quote the section, apply the dates and amounts in the case, then conclude.
Keep the number table ready: 30 days (scrutiny explanation), 15 days (GSTR-3A), 30 days (file return after service of the assessment order).
In case scenarios, check whether the person is registered and whether a return was filed. That decides between Section 61, Section 62 and Section 63.
Always add the proviso that interest and late fee continue after a Section 62 order is deemed withdrawn.

Practice questions from Returns

Scrutiny of Returns and Notice to Non-Filers in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Scrutiny of Returns and Notice to Non-Filers: frequently asked questions

What is the time limit to reply to an ASMT-10 notice?

The explanation must come within 30 days of being informed of the discrepancy, or any further period the proper officer permits. The reply is made in Form ASMT-11. If you do not give a satisfactory explanation, the officer can initiate action such as audit, inspection or demand.

Is scrutiny under Section 61 the same as an audit?

No. Scrutiny is a verification of the return and related particulars to check correctness. Audit under Section 65 is a separate, deeper process that the officer may start if scrutiny does not resolve the issue.

What is Form GSTR-3A?

It is the notice under Section 46 and Rule 68 sent electronically to a registered person who has not filed a return. It asks the person to file the return within 15 days. If the person still does not file, the officer may proceed to best judgment assessment under Section 62.

Can a Section 62 assessment order be cancelled?

Yes, in effect. Under Section 62(2), if you file a valid return within 30 days of service of the assessment order, the order is deemed withdrawn. You must still pay interest under Section 50(1) and the late fee under Section 47.