February 23, 2023

Analysis of risk parameters of scrutiny of GST Returns as per CBIC SOP guidelines

With the introduction of Goods and Services Tax (GST) in India, there has been a need for a comprehensive scrutiny process to ensure compliance and detect any fraudulent activities. To achieve this, the Central Board of Indirect Taxes and Customs (CBIC) has laid down standard operating procedures (SOP) for scrutiny of GST returns.

What are the risk parameters for scrutiny of GST returns?

CBIC has identified several risk parameters for scrutinizing GST returns. Some of these parameters include:

1. High-value transactions : Transactions above a certain threshold value are considered high-risk and are subject to scrutiny.

2. Unusual input-output ratio : If the input-output ratio of an entity is significantly different from the industry average or norm, it raises a red flag.

3. Repeat filings : Entities that file returns on a repeated basis are scrutinized to detect any anomalies or discrepancies.

4. Non-filers or late filers : Entities that fail to file returns or file them after the due date are at a higher risk of scrutiny.

5. Cash transactions : Transactions that involve cash are closely scrutinized as they are at a higher risk of being used for fraudulent activities.

What is the process for scrutiny of GST returns?

The process for scrutiny of GST returns involves the following steps:

1. Selection of returns : The CBIC selects the returns to be scrutinized based on the risk parameters.

2. Data analysis : The data submitted in the GST returns is analyzed to detect any discrepancies or anomalies.

3. Communication with taxpayers : In case any discrepancies are detected, the taxpayer is informed and given an opportunity to explain or rectify the same.

4. Assessment : In case the discrepancies are not rectified or explained to the satisfaction of the CBIC, an assessment order is issued.


The scrutiny of GST returns is an important process to ensure compliance and detect any fraudulent activities. The CBIC has identified several risk parameters and laid down SOP guidelines for the same. It is important for entities to comply with the GST regulations and file accurate returns to avoid scrutiny and any potential penalties or fines.


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