Under CGST Rule 99, a GST officer can scrutinise your filed returns and issue a formal notice (Form ASMT-10) whenever a discrepancy is found. This rule applies to every registered GST taxpayer in India. If you ignore the notice, the officer can initiate audit or investigation proceedings. As of 2026, thousands of notices are being issued automatically through the GSTN system, so understanding the rule is critical for every business.

• Notice must be replied to within 30 days of receipt (extendable with permission).
• Failure to reply can lead to best-judgement assessment under Section 62 of the CGST Act.
• Common triggers: ITC mismatch (GSTR-2B vs GSTR-3B), turnover difference (GSTR-1 vs GSTR-3B), excess ITC claims.

What is CGST Rule 99?

CGST Rule 99 is the procedural rule under the Central Goods and Services Tax Rules, 2017 that prescribes the process for scrutiny of GST returns by a proper officer. When the officer finds any apparent discrepancy in a return filed by a taxpayer, the rule authorises him to serve a notice seeking an explanation. The entire workflow is paperless and is tracked through the GST portal.

The rule is linked to Section 61 of the CGST Act, 2017, which grants the officer the power to scrutinise returns to verify their correctness. Rule 99 provides the procedural mechanics: the form to use, the timelines, and the follow-up actions.

CGST Rule 99 – Step-by-Step Process

Step 1: Officer Identifies a Discrepancy

The GST system continuously compares data across GSTR-1, GSTR-2B, GSTR-3B and Annual Return (GSTR-9). When the system or the officer spots a mismatch — for example, ITC claimed in GSTR-3B exceeding ITC available in GSTR-2B — a scrutiny flag is raised.

Step 2: Notice in Form ASMT-10

The officer issues Form ASMT-10 on the GST portal. This notice details the specific discrepancy observed and requests the taxpayer to furnish an explanation within 30 days from the date of service. On written application, the officer may grant additional time.

Step 3: Taxpayer Reply in Form ASMT-11

The registered taxpayer must log in to the GST portal and submit a reply in Form ASMT-11. The reply should clearly explain the reason for the discrepancy, supported by relevant documents such as purchase invoices, credit notes, e-way bills, and reconciliation statements.

Step 4: Acceptance or Further Action

If the officer finds the explanation satisfactory, he issues a closure in Form ASMT-12 and the scrutiny is dropped. If the explanation is not accepted, the officer can initiate:

• Audit under Section 65 (Rule 101)
• Special audit under Section 66
• Investigation or search under Section 67
• Demand and recovery proceedings under Sections 73 or 74

Key Forms Under CGST Rule 99

Form	Purpose	Issued By
ASMT-10	Notice of scrutiny detailing discrepancy	GST Officer
ASMT-11	Taxpayer's reply to the scrutiny notice	Taxpayer
ASMT-12	Acceptance of explanation / closure of scrutiny	GST Officer

Common Reasons for Receiving ASMT-10

As of 2026, the GST department has significantly ramped up automated scrutiny. The most frequent triggers are:

• ITC mismatch: ITC claimed in GSTR-3B is higher than ITC reflected in GSTR-2B. Read our detailed guide on GSTR-3B vs GSTR-2B ITC difference notice.
• Turnover mismatch: Outward supplies declared in GSTR-1 differ from what is reported in GSTR-3B.
• HSN code discrepancy: HSN codes in invoices do not match what is reported in returns. See our guide on GST notice for HSN code mismatch.
• Reverse charge non-compliance: RCM liability not paid on services such as legal fees, GTA, or import of services.
• Excess refund claims: Refund claimed exceeds eligible amount based on tax paid and exports declared.
• Non-filing or late filing: Discrepancies arising from delayed or amended returns. See also: GST registration cancellation for non-filing of returns.

What Happens if You Ignore the Notice?

Ignoring an ASMT-10 notice is one of the costliest mistakes a GST-registered business can make. Under Rule 99(3), if no satisfactory explanation is given, the officer proceeds with one or more of the following:

• Best-judgement assessment under Section 62: The officer estimates your tax liability based on available data, often resulting in a demand far higher than your actual liability.
• Interest under Section 50: Interest at 18% per annum is levied on any short-paid or unpaid tax.
• Penalty under Section 73 or 74: Penalty can range from 10% to 100% of the tax demanded depending on whether fraud is alleged.
• Blocking of ITC: Your input tax credit may be blocked pending resolution.

A timely, well-drafted reply in Form ASMT-11 with supporting documents is the single most effective way to close the matter without a demand order.

How to Reply to an ASMT-10 Notice?

Filing a strong ASMT-11 reply requires both technical knowledge of GST law and a clear understanding of your business transactions. Here is the recommended approach:

1. Download the notice from your GST portal dashboard under Services > User Services > View Notices and Orders.
2. Identify the exact discrepancy mentioned and reconcile it with your internal records (purchase register, sales register, books of account).
3. Prepare a reconciliation statement explaining the difference. For ITC mismatches, provide invoice-level details of credits that appear in your books but not in GSTR-2B (e.g., invoices uploaded by suppliers after the cut-off date).
4. Attach supporting documents: invoices, credit notes, bank statements, contracts, debit notes as applicable.
5. Submit ASMT-11 on the GST portal within the stipulated 30-day window. If more time is needed, apply for an extension before the deadline expires.
6. Follow up to ensure the officer issues ASMT-12 (closure) and the matter is not escalated.

The quality of the reply largely determines the outcome. A vague or incomplete reply often invites further questions or escalation to audit. This is why professional support at this stage is strongly advisable.

CGST Rule 99 vs Rule 101: How Are They Different?

Feature	CGST Rule 99 (Scrutiny)	CGST Rule 101 (Audit)
Trigger	Discrepancy in filed returns	Departmental audit plan or risk criteria
Notice Form	ASMT-10	ADT-01
Reply Form	ASMT-11	ADT-02 (audit report)
Scope	Specific discrepancy in a return	Comprehensive examination of books and records
Timeline for completion	No fixed outer limit; officer driven	Audit to be completed within 3 months (extendable)
Outcome if unresolved	Escalates to audit/investigation/demand	Demand and recovery proceedings

For a detailed look at the GST audit notice process, see our guide on GST ADT-01 audit notice under Rule 101.

GST Return Scrutiny Focus Areas in 2026

As of July 2026, the GST Council and the Central Board of Indirect Taxes and Customs (CBIC) have prioritised scrutiny in the following areas:

• FY 2022-23 and FY 2023-24 returns: Extended scrutiny drives are ongoing for these financial years.
• Transitional ITC claims: Remaining disputes relating to TRAN-1 and TRAN-2 credits.
• E-commerce sellers: Turnover reconciliation between GST returns and TCS credit received from platforms.
• Real estate sector: Mismatch between consideration received and GST paid on under-construction projects.
• Exporters: IGST refund verification against actual export proceeds and shipping bills.

How Taxocity Helps You Handle CGST Rule 99 Notices

Taxocity has been assisting Indian businesses with GST compliance for over three decades. With a trust rating of 4.8/5 from 5,000+ verified reviews and a 100% compliance guarantee, Taxocity provides end-to-end support from the moment you receive an ASMT-10 notice to full closure.

• Notice analysis: Our real human experts review your ASMT-10 notice and identify the exact discrepancy and its root cause.
• Reconciliation support: We prepare detailed reconciliation statements (GSTR-2B vs books, GSTR-1 vs GSTR-3B) to support your reply.
• ASMT-11 drafting: We draft a complete, legally sound reply with supporting annexures — reducing the risk of escalation.
• End-to-end follow-up: We track the notice on the portal and ensure ASMT-12 (closure order) is received.
• Ongoing GST filing: Prevent future notices with our GST filing services that ensure accurate, timely return filing every month.

If you have already received a scrutiny notice or want to ensure your returns are error-free, our experts are ready to help.

Talk to a GST Compliance Expert Today

Key Takeaways

1. CGST Rule 99 empowers GST officers to scrutinise returns and issue Form ASMT-10 for any apparent discrepancy.
2. Taxpayers must reply via Form ASMT-11 within 30 days of receiving the notice.
3. If the reply is accepted, the officer closes the scrutiny via Form ASMT-12.
4. Ignoring the notice leads to best-judgement assessment, interest at 18% p.a., and penalties up to 100% of tax.
5. Common triggers include ITC mismatches, turnover differences, HSN discrepancies, and RCM non-compliance.
6. A professional, well-documented ASMT-11 reply is the most effective way to close the matter at the scrutiny stage itself.
7. Accurate, timely GST return filing is the best way to avoid ASMT-10 notices altogether.

Disclaimer

The information provided in this article is for general educational purposes only and does not constitute tax, legal, or professional advice. GST laws and rules are subject to amendments by the government. Taxpayers are strongly advised to consult a qualified tax advisor or GST practitioner before taking any action based on the contents of this article. Taxocity accepts no liability for decisions made in reliance on this content.