ASMT-10: Scrutiny of Returns for Ecommerce Sellers

In short

• ASMT-10 is a scrutiny notice under section 61 of the CGST Act and rule 99 of the CGST Rules.
• Who sends it: a GST officer, not the system. The officer has checked your returns and lists the differences they found.
• How you reply: in Form ASMT-11, within the time stated in the notice. You can ask the officer for more time.
• If your explanation is accepted: the officer records it in Form ASMT-12 and the matter closes.
• If it is not accepted, or you do not reply: the officer can move to a show cause notice, an audit, or other action.

What the notice is, and the law behind it

Section 61 lets the proper officer scrutinise a return "to verify the correctness" of it and to tell you about any discrepancies. Rule 99 sets out the steps:

1. The officer issues ASMT-10 with the details of the discrepancy. The notice may also give the amount of tax, interest and other dues the officer has worked out.
2. You can accept the discrepancy and pay through Form DRC-03, or explain it in Form ASMT-11. Either way, reply within the period stated in the notice, or the longer period the officer allows.
3. If the explanation is acceptable, the officer issues ASMT-12, and no further action follows on those points.
4. If you do not reply, or the reply is not satisfactory, the officer may start proceedings. That can mean a show cause notice under section 73 or 74 (for FY 2023-24 and earlier) or section 74A (for FY 2024-25 onwards), an audit under section 65, a special audit under section 66, or inspection under section 67.

ASMT-10 has no separate time limit of its own. A demand that follows from it must still be raised within the time limit of section 73, 74 or 74A, and each of those counts from the due date of the annual return for the year. Check the dates for your year before assuming a year is "closed".

Why ecommerce sellers receive it

Marketplace sellers produce a lot of third-party data, and officers compare it with your returns. The common points in an ASMT-10 are:

• Your turnover vs the marketplace's GSTR-8. Every marketplace that collects tax at source (TCS) under section 52 files GSTR-8. That return shows the net value of your sales through it. If your GSTR-3B turnover is lower than the total of the GSTR-8 figures, the officer will ask why. The TCS rate this site uses is in the box below.
• GSTR-1 vs GSTR-3B. The same gap that triggers DRC-01B, raised again for the full year.
• ITC claimed vs GSTR-2A/2B. Credit claimed above what suppliers reported, including ITC claimed from suppliers whose registration was later cancelled.
• Blocked credits under section 17(5). Examples are food, gifts and free samples, and staff welfare.
• Reverse charge not paid. This covers goods transport agencies, legal services and imported services such as foreign software and advertising.
• E-way bills vs turnover. The value moved under e-way bills is higher than the turnover declared.
• Interest. Interest under section 50 on tax paid late, which officers calculate from the return filing dates.
• GSTR-9 and GSTR-9C. Differences between the annual return, the reconciliation statement and the monthly returns.

Step-by-step: how to deal with it

1. Find the notice and its date. It appears under Services → User Services → View Additional Notices/Orders. Note the reply date. If the period is too short for the work, ask the officer for more time in writing, before the date, with a reason.
2. List every point in the notice separately. Officers often group several issues into one table. Number them and reply to each by its number.
3. Rebuild each figure the officer used. Ask which data the figure came from: GSTR-8, GSTR-2A, e-way bills or GSTR-9. Rebuild it from that same data. Many differences disappear once you compare like with like. For example:
   • GSTR-8 shows the net value after returns, while your figure may be before returns;
   • GSTR-8 is filed by the marketplace in the month it collects, which may not be the month you invoiced.
4. Sort each point into one of three groups:
   • No difference. For example, the officer counted the same sales twice, or compared amounts including GST with amounts excluding GST.
   • A timing or classification difference. For example, sales reported in a later return or under another GSTIN of the same PAN.
   • A real short payment.
5. Pay what you accept, before you reply. Pay through DRC-03 with interest and quote it in ASMT-11. If you pay tax and interest before a show cause notice is issued, in a case without fraud, the penalty on that amount is avoided under section 73 or 74A, whichever applies.
6. File ASMT-11 with a reconciliation annexure. State the facts, the arithmetic and the documents. Ask for a personal hearing if a point needs explanation.
7. Follow up for ASMT-12. If nothing arrives, ask the officer in writing whether the reply has been accepted. Keep the acknowledgement.

Documents to gather

• GSTR-1, GSTR-3B, GSTR-9/9C, and GSTR-2A/2B for the year.
• The marketplace's TCS statements. These are the TCS credits shown under TCS/TDS credit received on the portal, which come from each marketplace's GSTR-8. Also the marketplace sales and returns reports.
• The sales register by channel (each marketplace, your own website, B2B), and the credit-note register.
• E-way bill summary for the year.
• The purchase register, supplier invoices for large ITC items, and proof that suppliers were registered on the invoice date.
• Cash ledger and DRC-03 for any payment.

How to word the reply

Answer point by point, in the order of the notice:

Point 1. Turnover in GSTR-3B lower than GSTR-8 by [amount]. The GSTR-8 figure includes [amount] of sales through [marketplace] for March, reported in our GSTR-3B for April, ARN [number]. It also includes [amount] of sales under our GSTIN in [state], which are reported in that GSTIN's returns. A reconciliation by marketplace and month is at Annexure A. No tax is short-paid.

Point 2. ITC claimed higher than GSTR-2A by [amount]. [Amount] relates to invoices that appear in GSTR-2B for [later periods]; the list is at Annexure B. [Amount] has been reversed through DRC-03 dated [date], reference [number], with interest.

Attach the working, not just the conclusion. An officer can accept a reconciliation they can check. They cannot accept "difference due to timing" with nothing behind it.

Common mistakes

• Not replying because the amount looks small. An unanswered ASMT-10 gives the officer grounds to issue a show cause notice for the whole amount.
• Accepting a demand that the data does not support. Pay only what your reconciliation confirms is due.
• Replying in a letter only. Use ASMT-11 on the portal, so the reply is on record against the notice, and attach your annexures there.
• Mixing up GSTINs. If you have a GSTIN in each warehouse state, reconcile each GSTIN separately. The officer's figures relate to the GSTIN on the notice.

Preventing it next time

• Reconcile against GSTR-8 every month. Compare GSTR-8 TCS credits with your sales by marketplace each month, not only at year end. The TCS & TDS credit calculator helps here.
• Reconcile the full year before you file GSTR-9. Your GSTR-1, GSTR-3B, GSTR-2B and books should agree.
• Keep a file for each year. It should hold the reconciliations and the evidence for every adjustment. Scrutiny often comes after the team that filed the returns has moved on.

When to take professional help

Take help when the notice:

• raises ITC from suppliers whose registration was cancelled;
• alleges suppression or fraud;
• covers several years;
• has already led to a show cause notice.

A show cause notice is a formal proceeding. A reply to it needs to answer every allegation, with evidence, because the order that follows can only be challenged by appeal.