📌 What Is ASMT-10 Notice?

ASMT-10 is issued under:

Section 61 of the CGST Act, 2017 – Scrutiny of Returns

It is a pre-demand notice issued when the officer finds discrepancies in returns filed by a registered person.

It is NOT a demand order.
It is an opportunity to explain.

⚖️ Legal Framework – Section 61

Under Section 61:

• Officer may scrutinize returns

• If discrepancies found → Notice in ASMT-10

• Taxpayer must reply in ASMT-11

• Officer issues ASMT-12 (acceptance) if satisfied

If reply is not satisfactory, proceedings under Section 73 or 74 may follow.

🔍 Common Reasons for ASMT-10 Notice

1️⃣ ITC mismatch between GSTR-3B and GSTR-2B
2️⃣ Difference between GSTR-1 and GSTR-3B turnover
3️⃣ Excess ITC claimed
4️⃣ Late filing inconsistencies
5️⃣ Mismatch with e-way bill data
6️⃣ Refund inconsistencies

ASMT-10 is data-driven. Most cases arise from system analytics.

🧠 3 Practical Scenarios

🟢 Scenario 1: ITC Claimed Higher Than GSTR-2B

Officer alleges excess ITC.

Response Strategy:

• Prepare vendor-wise reconciliation

• Explain timing differences

• Attach supporting documents

• Clarify eligible ITC under Section 16

Many such mismatches are explainable.

🟢 Scenario 2: GSTR-1 vs GSTR-3B Turnover Difference

GSTR-1 shows ₹50 lakh, but GSTR-3B shows ₹48 lakh.

Possible Reasons:

• Amendments

• Credit notes

• Reporting differences

Reply Strategy:

• Provide reconciliation statement

• Attach working

• Explain adjustment entries

🟢 Scenario 3: Refund Claimed But Output Liability Shown Differently

Officer questions refund eligibility.

Response Strategy:

• Provide calculation sheet

• Link with zero-rated supply

• Clarify tax payment trail

Structured reply prevents escalation.

📋 How to Reply to ASMT-10 (Step-by-Step)

Step 1: Analyse Discrepancy Carefully

Do not rush into reversal.

Step 2: Prepare Detailed Reconciliation

Attach working papers.

Step 3: Upload Reply in ASMT-11

Respond within prescribed time.

Step 4: Preserve Documentation

Maintain copy of submission.

⚠️ What Happens If You Ignore ASMT-10?

If no reply is filed:

• Officer may proceed under Section 73 (non-fraud)

• Or Section 74 (fraud cases)

• Demand notice in DRC-01 may be issued

Early reply avoids litigation.

❌ Common Mistakes Taxpayers Make

❌ Reversing ITC without legal analysis
❌ Giving casual one-line reply
❌ Ignoring reconciliation
❌ Missing response deadline

This converts a scrutiny notice into a demand dispute.

💰 Is There Any Penalty at ASMT-10 Stage?

No penalty at scrutiny stage.

However, if converted into demand under Section 73/74, interest and penalty may arise.

Hence, ASMT-10 is a preventive opportunity.

🏁 Final Takeaway

ASMT-10 is not a punishment — it is a compliance check.

Proper reconciliation and structured response at this stage can prevent demand proceedings and unnecessary litigation.

📞 Professional Advisory Note

Early professional review of ASMT-10 discrepancies significantly reduces risk of conversion into Section 73 or 74 demand notices.