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CA Final · Indirect Tax Laws · Returns

A registered person did not accept the discrepancies in an ASMT-10 notice and gave no satisfactory explanation within thirty days or any extended period. What can the proper officer do under section 61(3) of the CGST Act, 2017?

The officer may initiate appropriate action, including under section 65, 66 or 67, or proceed to determine tax and other dues under section 73 or 74 or 74A. Scrutiny does not end without consequence, and a return is not cancelled automatically.

  1. AOnly close the matter, since scrutiny cannot lead to further action
  2. BOnly issue a fresh ASMT-10 notice every thirty days
  3. CInitiate appropriate action, including under section 65, 66 or 67, or determine tax and dues under section 73 or 74 or 74ACorrect
  4. DCancel the return filed for that month automatically

Explanation

Section 61(3) allows the officer to initiate appropriate action including audit (65), special audit (66), inspection (67) or determination under section 73, 74 or 74A where no satisfactory explanation is given, or where an accepted discrepancy is not corrected in the next return. Scrutiny is therefore not a dead end, and there is no automatic cancellation of returns.

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