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Indirect Tax Laws and Practice · GST Returns

Scrutiny of Returns under GST: Rule 99 and ASMT-10

Updated 11 October 2026 · Fact-checked

Scrutiny of returns is the proper officer's desk check of a registered person's return under section 61 of the CGST Act. If the officer finds a discrepancy, Rule 99 requires notice in FORM GST ASMT-10. You reply in ASMT-11 within 30 days or the extended time. If the reply is acceptable, the officer issues ASMT-12.

Understand Scrutiny of Returns (Rule 99)

Every registered person files returns on self-assessment. The department does not verify each one at filing. Section 61 lets the proper officer scrutinise the return and related particulars to verify its correctness. It is a check based on information available with the officer, such as returns, e-way bill data and other records.

If the officer spots a discrepancy, Rule 99(1) requires a notice in FORM GST ASMT-10. The notice informs you of the discrepancy and asks for your explanation within a time not exceeding thirty days from the date of service, or such further period as the officer permits. Where possible, the notice must also quantify the tax, interest and any other amount payable because of the discrepancy.

You then have two options under Rule 99(2). You can accept the discrepancy, pay the tax, interest and other amount arising from it, and inform the officer. Or you can furnish an explanation for the discrepancy. Both are done in FORM GST ASMT-11.

If the officer finds your explanation or information acceptable, Rule 99(3) says the officer informs you in FORM GST ASMT-12. Section 61(2) adds that no further action is then taken on that matter.

If you give no satisfactory explanation within thirty days (or the extended period), or you accept the discrepancy but do not correct it in your return for the month in which you accepted it, section 61(3) lets the officer take appropriate action. That includes audit under section 65, special audit under section 66, inspection, search and seizure under section 67, or determination of tax under section 73, 74 or 74A. Scrutiny is therefore a first step. It is not itself an assessment or an adjudication.

Key rules to remember

Legal basis of scrutiny
Section 61 CGST Act: proper officer may scrutinise return and related particulars to verify correctness
Procedure is in Rule 99. The officer informs you of discrepancies and seeks your explanation.
Notice of discrepancy
FORM GST ASMT-10, reply time ≤ 30 days from date of service or further period permitted
Notice should, where possible, quantify tax, interest and any other amount payable.
Reply by the registered person
FORM GST ASMT-11: accept and pay, or furnish explanation
Rule 99(2). Acceptance involves paying tax, interest and other amount arising from the discrepancy.
Acceptance by the officer
FORM GST ASMT-12
Rule 99(3). Issued when explanation or information is found acceptable. Section 61(2): no further action on that matter.
Consequence of no satisfactory reply
Section 61(3): audit under section 65, special audit under section 66, inspection, search and seizure under section 67, or determination of tax under section 73, 74 or 74A
Applies if no satisfactory explanation within thirty days (or extended period), or if discrepancy is accepted but not corrected in the return for the month of acceptance.

How to solve Scrutiny of Returns (Rule 99) questions

Use this sequence for any question on scrutiny of returns. It keeps your answer tied to the section and rule.

  1. 1Identify the stage: scrutiny (section 61 and Rule 99), not audit (section 65) or assessment.
  2. 2State who acts and why: the proper officer scrutinises the return and related particulars to verify correctness, using information available with him.
  3. 3Name the notice: discrepancy found, so FORM GST ASMT-10, with the time limit of up to thirty days from service, extendable by the officer, and quantification where possible.
  4. 4State the registered person's options: accept and pay tax, interest and other amount, or give an explanation, both in FORM GST ASMT-11.
  5. 5Decide the outcome: acceptable reply gives ASMT-12 and no further action; unsatisfactory or no reply, or accepted but uncorrected, allows action under section 61(3).
  6. 6Apply to the numbers or facts: compute any tax or interest from the discrepancy and check the dates against the thirty-day period.
  7. 7Conclude with a clear statement of what the person should do and the consequence of not doing it.

Quickest way: Form-and-outcome chain

When to use it: Use this for MCQs and short case questions that ask which form is used, who files it, or what happens next.

  1. Remember the chain: ASMT-10 (officer's notice), ASMT-11 (your reply), ASMT-12 (officer accepts).
  2. Check the clock: thirty days from service of ASMT-10, or longer if the officer permits.
  3. If the reply is accepted, the matter ends. If not, section 61(3) opens the way to audit, inspection, search or demand proceedings.
  4. Reject options that mention visiting the premises or issuing a demand order at the scrutiny stage.

Common mistakes in Scrutiny of Returns (Rule 99)

  • Treating scrutiny as an audit.

    Both involve checking a registered person's compliance, so they sound alike.

    Fix: Scrutiny under section 61 is a verification of the return and related particulars using information available with the officer, and the notice of discrepancy is in ASMT-10. Audit under section 65 needs a notice of not less than fifteen working days, issued in FORM GST ADT-01 under Rule 101(2), and may be at your premises or the officer's office.

  • Saying the reply to ASMT-10 is filed in ASMT-12.

    The form numbers are easily jumbled.

    Fix: Your reply, whether acceptance or explanation, is in ASMT-11. ASMT-12 is the officer's communication that the reply is acceptable.

  • Stating the reply period as a fixed thirty days.

    Students remember the number and skip the wording.

    Fix: The rule says a time not exceeding thirty days from service of the notice, or such further period as the officer permits. Write both parts.

  • Assuming acceptance of the discrepancy needs no payment.

    Students think accepting is only a statement.

    Fix: Rule 99(2) requires payment of the tax, interest and any other amount arising from the discrepancy when you accept it. Under section 61(3), if you accept but fail to correct it in your return for the month of acceptance, the officer may initiate action.

  • Believing scrutiny automatically ends in a demand.

    The notice looks like a show cause notice.

    Fix: ASMT-10 only seeks an explanation. If your explanation is acceptable, no further action follows. Demand proceedings under section 73, 74 or 74A come only through section 61(3) if the matter is unresolved.

Worked examples

Example 1

Sundaram Traders, a registered person in Coimbatore, receives a notice in FORM GST ASMT-10 served on 5 March pointing out that the tax paid in its return is lower than the tax shown in its other filed statements. State what Sundaram Traders can do, the time available, and what happens next.

Show the solution
  1. The notice is under Rule 99(1) following scrutiny under section 61. It informs of a discrepancy and seeks an explanation.
  2. Time: the reply is due within a period not exceeding thirty days from the date of service, so up to 4 April, unless the officer permits a further period.
  3. Option 1: if the discrepancy is correct, accept it, pay the tax, interest and any other amount arising from it, and inform the officer in FORM GST ASMT-11. Separately, under section 61(3), if it accepts the discrepancy but fails to correct it in its return for the month of acceptance, the officer may initiate action.
  4. Option 2: if the discrepancy is not correct, furnish an explanation with supporting details in FORM GST ASMT-11.
  5. Outcome: if the officer finds the reply acceptable, he informs Sundaram Traders in FORM GST ASMT-12 and no further action is taken on that matter.
  6. If no satisfactory explanation comes in time, or the discrepancy is accepted but not corrected, the officer may act under section 61(3), for example audit under section 65 or determination of tax under section 73, 74 or 74A.

Answer: Sundaram Traders may accept and pay, or explain, in FORM GST ASMT-11 within thirty days of service (up to 4 April) or any longer period allowed. An acceptable reply ends the matter through ASMT-12; otherwise section 61(3) action can follow, including where an accepted discrepancy is not corrected in the return for the month of acceptance.

Example 2

Which one of the following correctly describes the procedure under Rule 99? (a) The registered person issues ASMT-10 and the officer replies in ASMT-11. (b) The officer issues ASMT-10, the registered person replies in ASMT-11, and the officer informs acceptance in ASMT-12. (c) The officer issues ASMT-12 and the registered person replies in ASMT-10. (d) The registered person files ASMT-12 to accept the discrepancy.

Show the solution
  1. Rule 99(1): the proper officer issues the notice of discrepancy in FORM GST ASMT-10.
  2. Rule 99(2): the registered person accepts and pays, or furnishes an explanation, in FORM GST ASMT-11.
  3. Rule 99(3): if the reply is acceptable, the proper officer informs the person in FORM GST ASMT-12.
  4. Check each option: (a) reverses the roles; (c) reverses the forms; (d) wrongly gives ASMT-12 to the taxpayer. Only (b) matches.

Answer: Option (b).

Exam tips

  • Learn the three forms in order: ASMT-10, ASMT-11, ASMT-12, and who issues or files each. This is a likely MCQ.
  • In a written answer, always cite section 61 for the power and Rule 99 for the procedure.
  • Write the thirty-day limit with the words 'or such further period as the officer permits'.
  • For scrutiny versus audit questions, compare the basis (information with the officer versus examination of books), the notice (ASMT-10 versus a notice of at least fifteen working days under section 65), and the outcome. Use a short two-column style in bullets.
  • Close case answers with the consequence under section 61(3) if the discrepancy is not resolved.

Practice questions from GST Returns

Scrutiny of Returns (Rule 99) 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 (Rule 99): frequently asked questions

What is the difference between scrutiny and audit under GST?

Scrutiny under section 61 is a verification of the return and related particulars, started by an ASMT-10 notice if a discrepancy is found. Audit under section 65 is a deeper examination of records, with a notice not less than fifteen working days before it begins. Audit has its own time limits, and its findings are communicated within thirty days of conclusion.

How do I reply to an ASMT-10 notice?

File your reply in FORM GST ASMT-11 within the time stated, which cannot exceed thirty days from service unless the officer permits more. Either accept the discrepancy and pay the tax, interest and other amount, or explain why the discrepancy is not correct. Attach supporting details.

What is ASMT-12?

ASMT-12 is the form in which the proper officer informs you that your explanation or the information you submitted is acceptable. After this, no further action is taken on that discrepancy.

What if I do not reply to the ASMT-10 notice?

Under section 61(3), if no satisfactory explanation is given within thirty days or the extended period, the officer may initiate appropriate action. This includes audit, inspection, search and seizure, or determination of tax under section 73, 74 or 74A.