Government of India Department of Revenue Central Board of Indirect Taxes & Customs Directorate General of Analytic & Risk Management F.No: DGARM! Tech/ SOP/20/2019 dated 22 april, 2019 STANDARD OPERATING PROCEDURE FOR “RISKY TAX PAYERS” AND OTHERS Doubts have been raised by the field formations regarding the modalities of taking action in respect of GSTINs identified by DGARM as “risky tax payers” or cases where there are delays in payment of taxes or filing of returns. The matter has been considered by the Board. Accordingly, it is clarified that on basis of reports / data shared by DGARM through the DDM feedback portal, the Zones / Commissionerates are requested to take action as per the following procedure: () _ DGARM will provide to jurisdictional Commissionerates of Central GST the list of identified tax payers contained in serially numbered reports through the Feedback App hosted ‘on DDM portal. Each report will contain the reasons why specific tax payers have been identified in the analytics exercise under taken by DGARM. (ii) The lists of taxpayers shared with the jurisdictional Commissionerates, contain tax payers under the jurisdiction of both States and Centre. This distinction shall be clearly provided for ease of reference and providing suitable feedback. (ii) With respect to the taxpayers under jurisdiction of States, Chief Commissioners are advised to use the existing institutional mechanism to share the list of such tax payers with the states. (jv) In respect of taxpayers under central jurisdiction, the Commissioner shall undertake data validation and select the cases which require enforcement action. Further, he/she has to decide whether such action is to be taken at level of Headquarters and retain those GSTINs. while distributing the remaining GSTINs on the basis of the Division code to the jurisdictional Asst. / Deputy Commissioner. (v) The Jurisdictional Asst. / Deputy Commissioner shall undertake data validation from the AlOs and after confirming that the jurisdiction and data are free of any errors, evaluatewhich of the cases may be selected for enforcement action, which should be retained, and distribute the remaining GSTINs to the Ranges as per ZCDR. Z It is re-iterated that all action owners must re-validate the data before initiating any action, since the environment is very dynamic and it is not improbable to find that by the time a GSTIN reaches the Range, the tax payer may have already taken steps for compliance 3. The manner in which the jurisdictional Range will approach the tax payer is indicated below. 3.1 Asa first step, the Range will send an e-mail from the official e-mail id to the tax payer explaining the reasons as to why he is being communicated and, where applicable, clearly indicating the nature of discrepancy in payment of tax or filing of returns etc. Representative texts of the email are at Annexure A. 3.2 __Ifno or an unsatisfactory response is received from the tax payer, the Range will issue a letter by speed post to the tax payer in this regard. If a Satisfactory response is still not forthcoming within the next 15 days, or if the letter is returned by the Postal Dept. for any reason, the Range Officer shall bring the matter to the notice of the Asst. / Deputy Commissioner. After weighing the facts, the Range Officer or Preventive Branch may visit principal place of business of the tax payer after due authorisation, 3.3. The provisions of Chapter XII of CGST Act, 2017 regarding scrutiny of returns (Section 61), assessment of non-filers of returns (Section 62), assessment of unregistered persons (Section 63) and summary assessment in certain special cases (Section 64), should be adhered while examining these tax payers. 4. The action owners are required to upload GSTIN-wise feedback on DGARM- DDM portal as soon as possible. The feedback report is collected in six broad heads, which are further sub-divided into various sub-heads as per Annexure B. oF In case any tax payer (GSTINs/PANs) appears in multiple Red Flags or other DGARM reports, the Commissionerates are required to examine the tax payer comprehensively covering all aspects mentioned in different Red Flags / reports. Such tax payers should be taken up on priority for necessary action.6. As far as feedback is concerned it can be uploaded only against one report which the Commissioner feels more appropriate for a tax payer and for rest of the Teports feedback can be uploaded under head “No action required" and subhead ‘Any other’ mentioning that the taxpayer is covered (under Report No._). 7. For any clarification, the Commissioner May refer the issue to the undersigned on email sanjaygupta.67@gov.in or discuss the same on phone 011-2140-0627, (Sanjay Gupta) Additional Director General (ARM) Annexures: A and BAnnexure A (Specimen letters to be addressed to Tax Payers with respect Red FI lagged GSTINs) Red Flag 1 Dear Sir/Madam, It has been noticed that GSTR- 3B returns have not been filed by due date 20" of for the period to It is requested to kindly file your returns and deposit your tax at the earliest. We take this opportunity to remind you that a tax payer is liable to file GSTR-3B returns as per dates prescribed in law. Kindly note that even if your liability is NIL, returns still have to be filed by due dates. Your prompt and timely payment of taxes is critical for national development. Thanking you in anticipation, Yours faithfully, (Superintendent) Range _, Div__, Office of the Commissioner of Central Goods & Services Tax (full postal Address)Red Flag 2 Dear Sir/Madam, During the scrutiny of your returns it has come to notice that the liability declared in GSTR 1 return/s for the period (ddimm/yy) ___ (dd/mmiyy)_ is Rs, — whereas the liability declared as Per GSTR-3B return/s is Rs. . It is requested to please clarify the above discrepancy at your earliest convenience by return email, preferably, over the next five working days. Your prompt and timely payment of taxes is critical for national development. Thanking you in anticipation, Yours faithfully, (Superintendent) Range __, Div__, Office of the Commissioner of Central Goods & Services Tax (full postal Address)Red Flag 3 Dear Sir/Madam, During the scrutiny of your returns it has come to notice that there is a difference in liability as seen from the e-way bill data when compared with GSTR - 3B return. The e- way bills generated by you, for the period to . (dd/mmiyy) show outward taxable supplies of Rs whereas as per GSTR-3B returns of the same period, the liability declared is Rs, . It is requested to Please clarify the above discrepancy by retum email, over the next five working days. Your prompt and timely payment of taxes is critical for national development. Thanking you in anticipation, Yours faithfully, (Superintendent) Range __, Div__, Office of the Commissioner of Central Goods & Services Tax (full postal Address)Red Flag 4 Dear Sir/Madam, It has been noticed that GSTR- 3B returns have not been filed by due date 20% of for the period to . On scrutiny, it has come to notice that during the above period: - i. there is GST liability on outward taxable supplies of Rs. as seen from the e-way bills generated by you there is GST liability of Rs ——- on output taxable supplies declared in your GSTR 1 return/s You received taxable supplies involving GST amount of Rs ————- Imported goods on payment of IGST of Rs i Itis requested to please clarify the above discrepancy by return email, over the next five working days. We take this opportunity to remind you that a tax payer is liable to file GST returns as per dates prescribed in law, failing which you are liable for being penalised. Kindly note that even if your liability is NIL, returns still have to be filed. Your prompt and timely payment of taxes is critical for national development. Thanking you in anticipation, Yours faithfully, (Superintendent) Range _, Div__, Office of the Commissioner of Central Goods & Services Tax (full postal Address),Red Flag 5 Dear Sir/Madam, During the scrutiny of your returns, the following discrepancy has come to notice of this office: date of filing | For the Period During the | During the Discrepancy GSTR 3B period, ITC} period ITC | in amount of available per] claimed for _| credit Table 3 of | domestic Inward | requiring to GSTR 2A Supplies as in | be clarified table 4(A)5 of GSTR 2A Itis requested to please clarify the above discrepancy by return email, over the next five working days, Your prompt and timely payment of taxes is critical for national development. Thanking you in anticipation, Yours faithfully, (Superintendent) Range __, Div__, Office of the Commissioner of Central Goods & Services Tax (full postal PACOIB Ss) recs. SosbS es chai naiaen eeeFe or for decision cares emi ans Paar ote Pe te Prey Coeur Pe ee) cd Coe Uy Rotary Cr Coes ¢ Feedback Form +Pertains to some other jurisdiction (re-assign) ‘Issue already under scrutiny (detection/recovery) “Issue is not required scrutiny after data validation ‘Issue is not reuired scrutiny in the light of local factors Any other (to be specified up to max. 50 characters) ‘No irregularity noticed after verification “Issue is not required for scrutiny after data validation on submission of reply by the party ‘Issue already under scrutiny (detection/recovery) +Pertains to some other jurisdiction (re-assign) ‘Any other (to be specified up to max. 50 characters) ‘*Suppression of taxable turnover (detection/recovery) ‘*Wrong availment of ITC (detection/recovery) ‘*Bogus/fake invoice (option of uploading GSTINs of bbuyers/suppliers) (detection/recovery) ‘*Undervaluation (detection/recovery) ‘*Misclassification (detection/recovery) ‘Fraudulent exports (detection/recovery) ‘*Wrong availment of exemption (detection/recovery) ‘Refund related issue (detection/recovery) *Any other (to be specified up to max. 50 characters) ‘The feedback in each of the sub-heads to be given separately for Supply of Goods aswell a Supply of Services ‘*Action is yet to be initiated ‘*Documents/reply not received Part documents received/additonal documents awaited ‘Documents received but under scrutiny *Not traceable Part documents received/additonal documents awaited *Detected/ party agreed to pay/payment awaited ‘Detected /party is contesting ‘sDocuments under scrutiny Further feedback to be given for each of the GSTINs as, ‘mentioned in Head-4