GST Notice Received? 7 Practical Steps Businesses Should Take Before Replying
A GST notice in your inbox or on the GST portal can be stressful. The good news is that most notices can be handled well if you stay calm, read them carefully and reply in an organised way. The bad news is that ignoring a notice, or replying in a hurry, can lead to tax demands, interest and penalties that were avoidable.
This guide explains the 7 practical steps every business should take before replying to a GST notice, in simple language and in the right order.
Don’t panic, don’t ignore, read the notice fully
Many businesses lose their best defence simply by not responding. A notice that is ignored can turn into an ex parte order, which means the officer decides the case on the department’s facts alone.
Read the whole notice, including every annexure and calculation sheet. Note down:
- The form and reference number
- The tax period and financial year covered
- The section of the CGST Act cited
- The amount of tax, interest and penalty mentioned
- The exact reason or “grounds” for the notice
- The reply date and the officer who issued it
Identify the type of notice
Not every GST notice is a demand. The type decides how serious it is and which form you must use to reply.
| Notice / Form | What it usually means | How you reply |
|---|---|---|
| Scrutiny notice (ASMT-10) | The officer found a mismatch or discrepancy in your returns and asks you to explain it | Reply in Form ASMT-11 |
| Pre-notice intimation (DRC-01A) | A proposed demand before a formal show cause notice | Part B of DRC-01A, and payment through DRC-03 if you agree |
| Show cause notice (DRC-01) | A formal notice asking why a demand should not be raised against you | Reply in Form DRC-06 |
| Return default notice (GSTR-3A) | You have not filed a return on time | File the pending return and pay dues |
| Cancellation show cause notice (REG-17) | The department proposes to cancel your GST registration | Reply in Form REG-18 |
Remember that DRC-01 is only the summary of a show cause notice. The detailed notice and its grounds must accompany it.
Verify it on the GST portal and note the deadline
Log in to the GST portal and check the notices and orders section to confirm the notice is genuine and has been issued to your GSTIN. Fake notices and phishing emails that copy the look of department notices do exist, so never click links or share OTPs from an unverified message.
Deadline: the time to reply is written in the notice itself. It commonly falls between 7 and 30 days, so treat the date printed on your notice as binding. If you need more time, apply for an extension before the due date, with a short reason.
Tip: make sure the email address and mobile number on your GST registration are current and monitored. Notices are served electronically, and a missed alert does not stop the clock.
Collect and reconcile your records
Most GST notices come from mismatches. Before you write a single line of reply, match the department’s figures against your own records:
- GSTR-1 (outward supplies) against GSTR-3B (tax paid)
- GSTR-2B (auto-drafted input credit) against your purchase register and ITC claimed
- Annual return (GSTR-9 and 9C, where applicable) against your audited books
- E-invoices and e-way bills against sales recorded
- Sales ledgers, purchase invoices, credit and debit notes, bank statements and contracts
Prepare a simple reconciliation statement. Very often it shows that the difference is due to timing, a data-entry error or a supplier’s default, and it becomes the backbone of your reply.
Understand the section and check the time limit
The section cited in your notice decides the rules, the penalty and the limitation period. In broad terms:
- Sections 73 and 74 generally apply to demands for periods up to FY 2023-24 (Section 73 for non-fraud cases and Section 74 for fraud, wilful misstatement or suppression).
- Section 74A applies to demands from FY 2024-25 onwards and covers both fraud and non-fraud cases under one framework.
Check three things:
- Is the correct section used? A notice for FY 2024-25 or later that cites Section 73 or 74 may be open to challenge.
- Is the notice within the time limit? If it was issued late, limitation is a valid ground and should be raised specifically in your reply.
- Does it allege fraud or suppression? If yes, the stakes and penalties are higher, so get professional help immediately.
Decide whether to pay, contest or both
After reconciling, you will usually find yourself in one of three positions:
- The demand is wrong: contest it fully with documents and legal grounds.
- The demand is partly right: pay the undisputed portion and contest the rest.
- The demand is correct: consider paying the tax and interest voluntarily through Form DRC-03. In many non-fraud cases, paying at the pre-notice stage can avoid penalty.
Take care with payments. Paying just to “close” a notice without checking can mean paying tax you never owed, or lose you the chance to challenge the interest calculation. Ask your CA to confirm the figures first.
Draft, file and keep proof of your reply
A strong reply is short, structured and supported by documents:
- Reply point by point to every allegation in the notice
- State the facts clearly and cite the relevant provisions, circulars and case law
- Attach the reconciliation, invoices, returns and any other evidence
- Raise limitation, jurisdiction and procedural objections where they apply
- Request a personal hearing and keep a note of the date
File the reply in the correct form on the GST portal before the due date, and save the acknowledgement. If the final order goes against you, you can usually file an appeal before the Appellate Authority within the prescribed time (generally three months from the order), along with a pre-deposit of part of the disputed tax.
Common Mistakes to Avoid
- Ignoring the notice or missing the reply date
- Replying without reconciling your data first
- Copying a generic template that does not match your facts
- Admitting liability in the reply without checking the numbers
- Not attaching documents, or attaching unorganised files
- Paying under the wrong head, or without proper intimation in the correct form
- Leaving the matter with an employee who has no GST litigation experience
When Should You Involve a Chartered Accountant?
You should speak to a CA as soon as you receive a show cause notice, a notice mentioning fraud or suppression, a cancellation notice, or any notice with a large amount. Early advice often decides whether a matter ends at a simple reply or turns into long litigation.
At G Kedia & Associates, our partners have deep experience in indirect taxes. This includes compliance, advisory, litigation and representing clients before the authorities. Learn more about our services or read about our team.
Quick checklist before you reply
- ☐ Notice read fully and verified on the GST portal
- ☐ Type of notice, section and form identified
- ☐ Reply deadline noted, extension planned if needed
- ☐ Returns, ledgers and invoices reconciled
- ☐ Limitation and jurisdiction checked
- ☐ Decision made on paying, contesting or both
- ☐ Reply filed in the right form with documents and acknowledgement saved
Frequently Asked Questions
What should I do first if I receive a GST notice?
Do not ignore it. Read the notice fully, note the notice type, section, tax period and reply date, confirm it on the GST portal, and then speak to your chartered accountant before you reply.
How much time do I get to reply to a GST notice?
The time is stated in the notice itself and often falls between 7 and 30 days. Treat the date printed on your notice as binding, and apply for an extension if you need more time.
Which form is used to reply to a GST show cause notice?
A show cause notice comes with a summary in Form GST DRC-01 and is replied to in Form GST DRC-06. A pre-notice intimation comes in Form GST DRC-01A and is answered in Part B of that form.
Can I pay the tax before the show cause notice is issued?
Yes. Tax and interest can be paid voluntarily using Form GST DRC-03. In many non-fraud cases, paying at the pre-notice stage can avoid penalty, so check your position with a CA first.
What if the notice was issued after the time limit?
Limitation is a valid ground. If a notice or order is issued beyond the statutory time limit, you should raise it specifically in your reply.
Received a GST notice? Get expert help before you reply.
Our team will review your notice, check the section and time limit, and help you prepare a strong, well-documented reply.
Talk to Our GST Experts