Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B, Get Practical GST Course in Delhi, 110088, by SLA Consultants India,

Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B

 

GST authorities issue scrutiny notices when they find discrepancies between GSTR-1 (Sales Return) and GSTR-3B (Summary Return). These notices can lead to penalties, ITC reversals, and tax demands if not addressed properly. Below is a guide to understanding and handling GST scrutiny notices effectively.

 

Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B, Get Practical GST Course in Delhi, 110088, by SLA Consultants India, New Delhi,

 

1. Why Do Businesses Receive GST Scrutiny Notices?

GST scrutiny notices are issued due to:

• Mismatch in GSTR-1 and GSTR-3B (higher sales reported in GSTR-1 but lower tax paid in GSTR-3B).
• Excess ITC claimed in GSTR-3B compared to GSTR-2B.
• Late or non-filing of GST returns leading to compliance issues.
• Differences in e-way bills vs. reported sales in GSTR-1.
• Wrongful ITC claims, tax underpayments, or incorrect classification of transactions.

 

2. Common GST Scrutiny Notices

 GST ASMT-10 (Tax Discrepancy Notice)

• Issued when GSTR-1 and GSTR-3B do not match.
• Taxpayers must provide explanations or pay the differential tax.

GST DRC-01 (Show Cause Notice for Tax Demand)

• Sent when significant tax liabilities or ITC mismatches are found.
• Requires businesses to justify discrepancies or make tax payments.

GST DRC-03 (Voluntary Tax Payment)

• Used to correct ITC claims or underpaid taxes before receiving a formal demand notice.

GST DRC-07 (Final Tax Demand Order)

• Issued after scrutiny if the taxpayer fails to respond or rectify discrepancies.
• Results in penalties, ITC reversals, or even GST registration cancellation.

 

3. How to Respond to a GST Scrutiny Notice?

Step 1: Analyze the Notice Carefully

• Check notice type, tax period, and reason for discrepancy.
• Compare GSTR-1, GSTR-3B, and GSTR-2B for mismatches.

Step 2: Gather Supporting Documents

• Sales invoices, tax payment challans, ITC registers, and reconciliation reports.

Step 3: File a Proper Response

• Reply through the GST portal within the given deadline.GST Course in Delhi
• Attach valid proofs to justify ITC claims or tax payments.

 

Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B, Get Practical GST Course in Delhi, 110088, by SLA Consultants India, New Delhi,

 

Step 4: Voluntary Payment (If Needed)

• If a mistake is found, use DRC-03 to pay tax before penalties apply.

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SLA Consultant Understanding GST Scrutiny Notices for GSTR-1 and GSTR-3B, Get Practical GST Course in Delhi, 110088, by SLA Consultants India, New Delhi, details with New Year Offer 2025 are available at the link below:

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E-Accounts, E-Taxation and (Goods and Services Tax) GST Training Courses

Module 1 - GST- Goods and Services Tax- By Chartered Accountant- (Indirect Tax)

Module 2 - Income Tax/TDS - By Chartered Accountant (Direct Tax)

Module 3 - Finalization of Balance sheet/ preparation of Financial Statement- By Chartered Accountant

Module 4 - Banking and Finance Instruments - By Chartered Accountant

Module 5 - Customs / Import and Export Procedures - By Chartered Accountant

 

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