If you’re a GST-registered business in India, you might have heard about Section 61 of the CGST Act, 2017—the provision that allows tax officers to scrutinize GST returns and ask for clarifications.

This process is not a full audit or investigation but a preliminary check to catch mismatches and errors early. In this guide, we’ll break down what Section 61 means, how the scrutiny process works, the forms you’ll receive, timelines, rules, and practical tips to handle it without stress.

What is Section 61 of the CGST Act?

Section 61 gives GST officers the power to scrutinize your returns (like GSTR-1, GSTR-3B) and compare them with other data sources such as:

• GSTR-2A / GSTR-2B (Input Tax Credit data)
• E-Way bill details
• Annual return (GSTR-9)
• Departmental analytics (DGARM reports)

If they find a discrepancy—for example, your outward sales in GSTR-1 don’t match GSTR-3B, or your ITC claims look suspicious—they can issue a notice asking for an explanation.

Key Point: This is not a penalty or demand notice—it’s just a scrutiny stage.

How the Scrutiny Process

The procedure for scrutiny is laid down in Rule 99 of the CGST Rules.

Step 1: Selection of Returns

• The GST department selects returns for scrutiny using risk parameters (data mismatches, unusual trends, etc.) via the DGARM & DDM portal.

Step 2: Issue of Notice – FORM GST ASMT-10

• If discrepancies are found, the officer sends you ASMT-10.
• This notice lists all issues and asks for your reply within 30 days (extendable).
• The officer may also quantify the tax, interest, and penalties if possible.

Step 3: Your Response – FORM GST ASMT-11

• You can either:
  1. Accept the discrepancy → Pay the tax & interest (usually via DRC-03) and mention it in your reply.
  2. Disagree → Give a detailed explanation with supporting documents.

Step 4: Officer’s Decision – FORM GST ASMT-12

• If the officer accepts your explanation → Case is closed, and no further action is taken.
• If the officer rejects your reply or you don’t respond → The case moves to audit, special audit, inspection, or demand proceedings under Sections 65, 66, 67, 73, 74, or 74A (from Nov 1, 2024).

Section 61 Scrutiny

Timelines You Must Remember

• Reply to ASMT-10: Within 30 days (or extended period allowed by officer).
• Officer’s decision: Usually within 30 days after receiving your reply.

If no reply: The officer can escalate the case immediately.