Section 61 scrutiny and ASMT-10: the first fork in the road
The cheapest place to end a dispute is the scrutiny notice. Most taxpayers treat it as correspondence and lose that chance.
Section 61 permits the proper officer to scrutinise a return and inform the registered person of discrepancies in ASMT-10, seeking an explanation. The taxpayer replies in ASMT-11. Where the explanation is accepted, the officer records it in ASMT-12 and no further action is taken. Where it is not, the officer may proceed to audit, inspection, or a determination under Section 73 or 74. A complete ASMT-11 with documents is the cheapest available exit from a demand.
What ASMT-10 usually contains
Differences between GSTR-1 and GSTR-3B. Differences between GSTR-3B and GSTR-2B. Credit availed on invoices from suppliers who have not filed. Reverse charge liability not discharged. Interest on late payment not paid.
Turnover differences against income tax returns or the financial statements. E-way bill data compared with reported outward supplies. Rule 42 and 43 reversals not made.
The list is generated from portal analytics, which means the discrepancies are arithmetic and answerable. Most are timing or classification differences, not liabilities.
How to answer it
Reply in ASMT-11 on the portal, within the time stated, with a reconciliation for each item and a document for each explanation.
Answer every item, including the ones that are obviously wrong, because an unanswered item becomes an admitted item in the subsequent notice.
Where a liability is genuinely payable, pay it under Section 73(5) with a covering letter, and say so in the reply. Payment at this stage avoids penalty entirely.
Ask for ASMT-12 where the explanation is complete. A recorded acceptance closes the year on that issue and is valuable evidence in a later audit.
Why this stage matters more than it appears
Everything you file here will be quoted back to you for years. A hurried reply that concedes an item to close the file will resurface in the next audit for a different year.
Conversely, a complete reply with documents establishes disclosure, which is the answer to a later allegation of suppression.
Section 61 also has a limit. Scrutiny is not an audit and does not permit a roving enquiry into records; where the queries move beyond the return, the officer should proceed under Section 65 or 67, and the objection is worth recording.
What to do on Monday
Treat ASMT-10 as a demand file from the first day, with a named owner and a deadline.
Answer every line item, including the plainly wrong ones, with a document.
Pay genuinely payable items under Section 73(5) with a covering letter and record it in the reply.
Ask for ASMT-12 and keep it; a recorded acceptance is worth more than a closed file.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Is a reply to ASMT-10 mandatory?
In substance yes. Non response permits the officer to proceed to assessment or determination, and the absence of a reply is recited in the later notice.
Can we get ASMT-12 as a matter of right?
Not as a right, but ask for it. Where the explanation is accepted, the rule contemplates its issue, and it is useful evidence later.
Does a scrutiny reply prevent a Section 73 notice?
Not automatically, but it narrows it, and it establishes the facts were disclosed.
Can the officer demand records under Section 61?
Scrutiny is of the return. A demand for a full record inspection should proceed under Section 65 or 67, and the distinction is worth recording in the reply.
What if the same discrepancy is raised for several years?
Answer each year separately with its own reconciliation. A single consolidated reply invites a single consolidated notice.
In this cluster
- GST show cause notice: how to read it, and how to answer it
- Section 73 versus Section 74: where the department overreaches, and how to prove it
- Section 74A: the unified limitation regime from FY 2024-25
- DRC-01A pre notice intimation: reply, pay, or wait?
- From DRC-01 to DRC-07: the adjudication chain in one page
- Vague and omnibus notices: how Amrit Foods, Brindavan Beverages and Oryx Fisheries decide GST demands
- Suppression of facts under Section 74: what the department must actually prove
- Personal hearing under Section 75(4): the right, and the consequence of denying it
- Orders that travel beyond the notice: Section 75(7) in practice
- Limitation for GST demands: the year by year table you should keep in every file
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.