GST Notices: Types of GST Notices & How to Reply to Them?

By Annapoorna

Updated on: Aug 12th, 2024

5 min read

GST Notices can be of many types- Show cause notice, Demand notice and scrutiny notice to mention a few. This article is an overview of all types of notices under GST and the options available for the taxpayer.

Latest Updates

23rd July 2024
In the Union Budget 2024, the Finance Minister proposed to insert Section 74A in the CGST Act to provide a common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25 onwards, for cases involving charges of fraud, suppression of facts or wilful misstatement and the cases not involving the charges of fraud, suppression of facts or wilful misstatement etc. Also, the time limit for the taxpayers to avail the benefit of reduced penalty, by paying the tax demanded along with interest, is being increased from 30 days to 60 days.
*This will come into force once notified by the CBIC.

What is Notice under GST

Notices under GST are communications by the GST Authorities. These are sent to the taxpayers specifically to remind or caution them of any defaults being noticed, specifically for not following the GST laws. In other cases, notices can be sent out just to collect more information from the taxpayer. Few cases where tax authorities send out notices are – where any movement of goods/ provision of services occurs without coming under tax lens or taxpayers operate suspiciously. GST authorities act based on any hints collected on verifying the taxpayer’s GST Returns or received from another Government department or from any third parties .

A notice can be called by different names like show cause notice (SCN), scrutiny notice or the demand notices, depending upon each case- the purpose or gravity of default or action required from the taxpayer. The common grounds for receiving notices under GST are lapses on the part of the taxpayers such as not registering under GST when otherwise required under law, non-filing or any delay in filing of GST returns, non-payment of GST or short payment of GST, excess Input tax credit claims, etc.

A taxpayer must promptly act or reply to notices within the time limit specified in such notice. Any failure to do so can land the taxpayer in a legal soup. In such eventuality, the authorities can proceed to prosecution or consider that as a willful default and charge penalty.

Latest Updates

11th May 2023
The department has launched the automated return scrutiny module from FY 2019-20 onwards for GST officers. The system aims to run automated checks to shortlist GSTINs/returns that will be scrutinised.

Most common reasons for GST Notices

Mismatch in details reported between GSTR-1 & GSTR-3B: scrutiny notice
Differences in Input tax credit claims made in GSTR-3B vis-a-vis GSTR-2B/2A
Delay in filing of GSTR-1 and GSTR-3B consecutively for more than six months
Inconsistent declaration in GSTR-1 and e-way bill portal
Non-reduction of prices due to reduced GST Rates with effect from the date notified by CBIC. Thereby, a default is committed by taxpayer (seller) for non-passing of the benefit of reduced prices (or GST rates) to the ultimate consumers. The practice is known as profiteering. Several anti-profiteering measures are taken by GST authorities to address the default.
Non-payment of GST liability (tax) or the short-payment of the tax with or without the intent to defraud: show cause notice (SCN)
GST Refund is wrongly made with or without the intent to defraud: show cause notice (SCN)
The Input tax credit is wrongly availed or utilised.
Where a business is liable but has failed to obtain GST registration and not discharged the tax and other liabilities under the GST Act
Inconsistencies in reporting of Exports in GSTR-1 with information available on ICEGATE. For example, Shipping Bill or the Bill of export lodged on ICEGATE but not reported in GSTR-1
For furnishing any information related to records to be maintained by a taxpayer
Conduct of the audit by tax authorities
Where information return was required to be furnished before tax authorities, but not submitted within the time limit stipulated.

Types of Notices under GST law

A quick guide on the different types of notices that can be received by the taxpayers, action to be taken by such taxpayers and time limit to respond to notice is available below:

Sl no	Name of the Form- Notice	Description	Reply or Action to be taken	Time limit to respond	Consequence of non-response
1	GSTR-3A	Default notice to non-filers of GST returns in GSTR-1 or GSTR-3B or GSTR-4 or GSTR-8	File the particular GST Returns, that is yet to be filed along with late fees for the delay and interest on the GST liability, if any	15 days from the date of receiving notice	Tax is assessed to the best judgment using the information available with the department. The penalty will be applicable of Rs. 10,000 or 10% of the tax due, whichever is higher.
2	CMP-05	Show cause notice – Questioning the eligibility to be a composition dealer	Must justify reasons as to why the taxpayer should continue to be eligible for the composition scheme	15 days of receipt of the notice	The penalty stipulated under section 122 and order in CMP-07 denying the benefit of composition scheme
3	REG-03	At the time of verifying the application for GST registration, a notice can be sent requiring the clarification for the information provided in the application or documents needed for verification. Also, the same form for the notice is applicable for amendment of GST registration	Reply letter in REG-04 with clarification or the information	Within 7 working days from the date of receiving the notice	Reject such application and inform the applicant electronically in REG-05.
4	REG-17	Show cause notice why should the GST registration not be cancelled for the reasons laid down in the notice	Reply letter in REG-18 with the reasons for non-cancellation of GST registration	Within 7 working days from the date of receiving the notice	Cancellation of GST registration in REG-19
5	REG-23	Show cause notice why the cancellation of GST registration must be revoked, for the reasons laid down in the notice	Reply letter in REG-24	Within 7 working days from the date of receiving the notice	Cancellation of GST Registration will be revoked
6	REG-27	In case of migration into GST by taxpayers of the VAT regime, a notice can be issued in REG-26 within the time limit prescribed, for not making application after obtaining provisional registration or not giving correct or complete details therein	Reply by applying in REG-26 and appear before the tax authority giving reasonable opportunity to be heard	None prescribed	Issue the cancellation of provisional registration in REG-28
7	PCT-03	Show cause notice for misconduct by the GST practitioner	Reply within the time prescribed in the show cause notice	Within the time prescribed in the show cause notice	Order the cancellation of the license as GST practitioner
8	RFD-08	Show cause notice as to why the GST refund must not be made to the applicant (taxpayer)	Reply letter in RFD-09	Within 15 days of receipt of notice	Make an order in RFD-06 for rejecting the GST Refund application
9	ASMT-02	Notice for Seeking Additional Information for provisional assessment under GST	Reply in ASMT-03 along with documents	Within 15 days from the date of service of this notice	Application for provisional assessment may be rejected
10	ASMT-06	Notice for seeking additional information for Final assessment under GST (for those who applied for provisional assessment)	Reply in 15 days of receipt of the notice	Within 15 days from the date of receipt of this notice	ASMT-07 can be passed without considering the views of taxpayer being assessed
11	ASMT-10	Scrutiny notice -Notice for intimating discrepancies in the GST return after scrutiny along with tax, interest and any other amount payable in relation to such discrepancy, if any	Reply in ASMT-11 giving reasons for discrepancies in the GST returns	Within the time prescribed in the show cause notice or a maximum time of thirty days from the date of service of notice or such deadline notified	Proceed to assess the taxpayer based on information at hand – may lead to prosecution and penalty
12	ASMT-14	Show Cause Notice for assessment under section 63- reasons for conducting the assessment on the best judgment basis	Reply in written form and appear before the GST authority issuing the notice	Within 15 days of notice	Assessment order in ASMT-15, may not be favouring the assessee
13	ADT-01	Notice for conducting audit by Tax authority under Section 65	Attend in person as directed in the notice or produce records	Within the time prescribed in the notice	If not, it is presumed that taxpayer does not possess books of accounts and proceedings will be initiated
14	RVN-01	Notice under section 108 issued to the taxpayer by the revisional authority before passing the revision order of appeals, giving the opportunity of being heard. Order of revision is usually passed to fix errors in order for appeals passed under section 108	Reply within the prescribed time and/or appear before the GST authority passing the order of revision on a given date and time	Within 7 working days from the date of service of the notice	The case will be decided ex parte on the basis of available records and on merits
15	Notice of Enquiry by Directorate of Anti-profiteering	Where the supplier has not passed on the benefit of ITC or reduced GST rates to the recipient/consumer, proceedings may be initiated by the Directorate of anti-profiteering. All interested parties will get a notice asking for more details.	Cooperate in the proceedings and provide evidence, if any	As may be specified in the notice	Proceedings will be initiated ex parte on the basis on available evidence.
16	DRC-01	Show cause Notice for Demand of Tax- Is issued for demanding tax paid shortly or not paid with or without an intent to defraud. It is served along with a statement of details in DRC-02	Reply in DRC-03 for paying the amount of tax demanded in the notice along with Interest and penalty, if any applicable. Use DRC-06 to reply to the show cause notice Note: Where no fraud is committed, the penalty is chargeable only if payment is made beyond the thirty days time limit	Within 60 days* of receipt of the notice	Order can be passed with higher penalty or prosecution- within three years from the due date of annual returns for the particular financial year for which tax is demanded
17	DRC-10 And DRC-17	Notice of Auction of Goods under section 79(1)(b) of the Act- Reference to the order of demand will be given, being the order for recovery through specified officer under section 79 OR Recovery through execution of decree	Must be able to pay the outstanding demand as per DRC-09	As may be specified in notice before the sale. Note that the last day of the bid or the last day of the auction cannot be before 15 days from the date of issue of the notice	Proceed to e-auction and sale
18	DRC-11	Notice to the successful bidder	Pay the full bid amount	Within the 15 days from the date of the auction	The proper officer can conduct a re-auction
19	DRC-13	Notice of Recovery of outstanding tax from a third person	Deposit the amount specified in the notice and reply in DRC-14	Not applicable	Deemed to be a defaulter in respect of the amount specified in the notice and can be subject to prosecution and penalties
20	DRC-16	Notice for attachment and sale of immovable/movable goods/shares under section 79	A taxpayer receiving this notice is prohibited from transferring or creating a charge on the said goods in any way and any transfer or charge created by you shall be invalid	Not applicable	Any contravention of the notice can invite prosecution and/or penalties

*This will come into force once notified by the CBIC.

Valid modes of sending GST Notices

Section 169 of the CGST Act states the different means of communicating the notices under GST. Any other mode of sending out the notice will not be valid under the law. Taxpayers must note the different modes of getting notices can be as follows:

Hand-delivering the notice either directly or by a messenger by a courier to the taxpayer or his representative.
By registered post or a speed post or a courier with an acknowledgement- addressed to the last known place of the business of the taxpayer.
Communication to the email address
Making it available on the GST portal after logging in.
By publication in a regional newspaper being circulated in the locality- that of the taxpayer based on the last known residential address.
If none of the above means is used, then by affixing it in some prominent place at his last known place of business or residence. If this is not found as reasonable by the tax authorities, they can affix a copy on the notice board of the office of the concerned officer or authority as a last resort.

The taxpayer need not act upon the notice or communication if it is received in any other modes apart from what is notified by GST law from time-to-time.

Reply to GST Notices & effects of not replying

Any reply to the GST notices can be submitted online on the GST portal. A taxpayer can use the digital signature or e-signature of the authorised personnel of such taxpayer or himself. Where the payment of tax and interest is required, pay such liability in the requisite form and manner. After such payment, the reply letter in requisite form must be submitted before the tax authority who sent notice.

In case the taxpayer receiving the GST notices does not reply within the stipulated time limit, he shall be liable for penalties and further proceedings as each case demands under the GST law.

A taxpayer can authorise another representative or a practising chartered accountant to look into the matters related to GST notices. He can do so, by issuing Letter of Authorisation under GST. GST authorisation letter gives the power of replying to GST notices by another representative and taking action on behalf of him.

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GST returns filing status
GSTR-1 vs GSTR-3B report (tax difference)
GSTR-3B vs GSTR-2A report (ITC difference)
Vendor Compliance report

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For more understanding, read further on GST Notices:

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About the Author

Annapoorna

Assistant Manager - Content

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

Quick Summary

The article discusses various types of GST notices like show cause notice, demand notice, and scrutiny notice. It highlights the recent proposed changes in the CGST Act and the consequences of not responding to notices. Different types of notices, actions to be taken, and response time limits are explained, along with valid modes of sending notices.