The Rajasthan Commercial Taxes Department has issued a comprehensive circular laying down fresh guidelines for the statewide faceless GST return scrutiny under Section 61 of the Rajasthan Goods and Services Tax (RGST) Act, 2017, replacing the earlier instructions issued in January 2022.

The new framework seeks to standardize scrutiny proceedings across the State, strengthen risk-based taxpayer selection, and streamline the process for subsequent demand and recovery proceedings under Sections 73, 74, or the newly introduced Section 74A of the RGST Act. 

Signed by Chief Commissioner, State Tax, Anandhi Palaniswamy, the circular has been issued to ensure uniformity in scrutiny proceedings for forthcoming years as well as pending cases. It also introduces a structured mechanism involving the Business Intelligence Unit (BIU), Integrated Tax Management System (ITMS), and faceless scrutiny for selected cases. 

BIU to Conduct Risk-Based Analysis of GST Returns

Under the revised framework, the Business Intelligence Unit (BIU) will periodically analyze data available on the GSTN portal to identify returns requiring scrutiny. The analysis will be based on a series of predefined risk parameters covering discrepancies in outward supplies, turnover, reverse charge liability, input tax credit (ITC), supplier compliance, and delayed payment of tax. 

The parameters include:

• Excess outward tax declared in GSTR-1 compared to GSTR-9 or GSTR-3B.
• Lower turnover disclosed in GSTR-3B compared with GSTR-7 (TDS) or GSTR-8 (TCS).
• Reverse charge liability mismatch between GSTR-9 and supplier disclosures.
• Excess outward liability reflected in e-way bills compared to GSTR-3B.
• ITC claimed in excess of GSTR-2A/2B or GSTR-9.
• Excess ISD credit.
• ITC availed from suppliers who failed to file GSTR-3B.
• ITC claimed from cancelled registrations.
• ITC availed beyond the limitation prescribed under Section 16(4).
• Interest short-paid or unpaid where GSTR-3B was filed belatedly. 

Mandatory and Weighted Risk Parameters

The circular categorizes the risk indicators into two groups.

Three parameters have been made mandatory for scrutiny, namely:

• Excess outward tax reported in GSTR-1 vis-à-vis GSTR-9/GSTR-3B.
• Excess outward liability reflected in e-way bills compared to GSTR-3B.
• ITC claimed from suppliers whose GST registrations have been cancelled.

The remaining parameters will be assigned suitable weightage to prepare the final list of taxpayers selected for scrutiny. The Chief Commissioner has also retained the power to approve additional risk parameters whenever necessary. 

Centralized Selection Through ITMS

The BIU will prepare the list of registered taxpayers selected for scrutiny after recording the risk parameters applicable to each case. Before finalization, the list will be cross-verified against taxpayers already selected for audit to eliminate duplication.

Following approval by the Chief Commissioner, cases will be allocated through the Integrated Tax Management System (ITMS) either for faceless scrutiny across the State or to jurisdictional officers, depending upon administrative decisions. 

Officers Directed to Conduct Holistic Scrutiny

While cases are selected centrally based on predefined parameters, officers have been instructed not to confine themselves to those discrepancies alone.

If, during scrutiny, additional discrepancies come to light, officers must include them in Form GST ASMT-10. Similarly, if discrepancies relating to other tax periods or even taxpayers not selected by headquarters are detected, officers are required to update the details on the ITMS portal and proceed with scrutiny independently. 

Detailed Procedure for Notices and Replies

Where discrepancies are identified, the proper officer must issue an intimation in Form GST ASMT-10 through the ITMS portal under Section 61 read with Rule 99 of the RGST Rules, clearly specifying every discrepancy noticed.

If the taxpayer submits an explanation through Form GST ASMT-11, and the explanation is found satisfactory, the proceedings will be closed by issuing Form GST ASMT-12.

Similarly, if the taxpayer accepts the discrepancies and voluntarily pays the tax, interest, and applicable dues through Form DRC-03, the proceedings will also be dropped after verification and issuance of ASMT-12. 

Unsatisfactory Replies to Lead to Demand Proceedings

Where the taxpayer either fails to furnish a satisfactory explanation within the prescribed period or accepts the discrepancies but does not undertake corrective action, the scrutiny officer must transfer the matter to the jurisdictional proper officer through the Boweb Portal along with a detailed scrutiny report.

The jurisdictional officer will thereafter initiate adjudication proceedings under Section 73, Section 74, or Section 74A, depending upon the nature of the case.

Importantly, the circular mandates that cases involving tax not paid, short paid, or wrongful ITC exceeding ₹5 crore shall require prior approval of the jurisdictional Additional Commissioner (Administration) before adjudication proceedings are initiated. 

Timeline for Transfer of Existing Cases

The circular also prescribes that scrutiny proceedings pertaining to the financial year 2022-23 that are pending with scrutiny officers must be transferred to the jurisdictional proper officers by 25 August 2026.

Where no discrepancies are ultimately found, officers are required to record the reasons through the feedback functionality available on the ITMS portal within the prescribed time. Senior officers have been directed to closely monitor compliance with these instructions. 

Manual Introduces New ‘Scrutiny Officer’ Role

Alongside the circular, the Department has also issued a detailed operational manual explaining the newly created “Scrutiny Officer” role within the GST system.

The manual permits State administrations to assign scrutiny powers across jurisdictions, enabling officers to conduct faceless scrutiny irrespective of territorial jurisdiction. It explains the procedure for assigning the role, initiating suo motu scrutiny proceedings across jurisdictions, uploading approval letters, recommending cases to jurisdictional officers, and maintaining electronic records within the GST portal. The manual also clarifies that the statutory process of issuing ASMT-10, receiving ASMT-11, and passing ASMT-12 remains unchanged even where scrutiny is conducted by officers outside the taxpayer’s jurisdiction. 

Strengthening Data-Driven GST Enforcement

The revised guidelines reflect Rajasthan’s move towards a more technology-driven and risk-based GST compliance framework. By combining automated analytics, faceless scrutiny, centralized allocation of cases, and standardized adjudication procedures, the Commercial Taxes Department aims to improve consistency in scrutiny proceedings while ensuring that high-risk cases are identified and pursued more effectively. The introduction of structured workflows and centralized monitoring is expected to enhance transparency, reduce duplication, and strengthen GST enforcement across the State.

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