04/08/2026
*Common GST return mistakes that can trigger scrutiny notices (ASMT‑10), audits, or even demand proceedings under GST:*
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*1. GSTR‑1 vs GSTR‑3B mismatch (higher liability in GSTR‑1 than tax paid in 3B):*
Indicates outward supplies disclosed but tax not fully paid; can lead to scrutiny under Section 61 and demand under Sections 73/74.
*2. GSTR‑3B vs GSTR‑2A/2B ITC mismatch (excess ITC in 3B )*
Suggests ineligible / excess Input Tax Credit (ITC) availed, or ITC on invoices not reflected in 2A/2B; can be treated as ITC wrongly availed/used, attracting Section 122(1)(vii) penalty.
*3. ITC availed after the statutory time‑limit (late ITC):*
Section 16(4) time‑limit breach (ITC taken after due date of September return / annual return) – flagged as a specific scrutiny parameter.
*4. Very high ITC utilisation vs cash payment (e.g. ITC utilisation > 5Ă— cash):*
Disproportionately low cash payment compared to turnover suggests possible bogus ITC or under‑reported outward supplies; flagged for scrutiny.
*5. High turnover with nil/negligible cash tax payment (e.g. turnover > â‚ą1 crore, cash nil):*
Risk that tax liability is not correctly discharged; department guidelines specifically flag such cases for scrutiny.
*6. GSTR‑3B vs e‑way bill mismatch:*
E‑way bill data showing higher movement of goods than turnover reported in returns indicates possible suppression of outward supplies.
*7. Turnover in GSTR‑3B lower than TDS/TCS turnover (GSTR‑7/8):*
If turnover reported in 3B is less than turnover as per TDS/TCS returns, it suggests under‑reporting of supplies.
*Note:* This might be the case of timing mismatch
*8. Non‑reporting of inter‑State B2C supplies in Table 3.2 of GSTR‑3B / Table 7B of GSTR‑1:*
Circular 89/08/2019‑GST clarifies that non‑reporting of such details affects IGST apportionment and is a contravention attracting penalty under Section 125.
*9. Non‑filing / delayed filing of periodic returns (GSTR‑3B, GSTR‑1, etc.):*
Section 59 read with Section 39 requires self‑assessment and timely filing; persistent default can lead to scrutiny, best‑judgment assessment, and penalty.
*10. ITC on capital goods not proportionately reversed against exempt / non‑business turnover (Rule 43 cases):*
Circular‑based scrutiny parameter: “Capital goods ITC vs exempted turnover” – non‑reversal indicates excess ITC claim.
*11. Non‑compliance with Rule 86B (cash payment minimum 1% where applicable):*
Cases where Rule 86B applies but taxpayer continues to pay almost entirely through ITC are specifically flagged for scrutiny.
