A GST notice is not necessarily an accusation. Most notices are the department asking you to explain a mismatch, file a pending return or clarify a point in your records. What turns a simple query into a demand with interest and penalty is usually a missed deadline or a reply that does not address the actual issue.
This article explains what to do in the first few days after a notice arrives.
1. Find the notice and note the due date
GST notices are issued on the GST portal, usually with an email or SMS to your registered contact details. After logging in, check both places:
- Services → User Services → View Notices and Orders
- The Additional Notices and Orders section, where many scrutiny, audit and show cause notices appear. This section is easy to miss.
Write down the date of issue and the date by which a reply is required. Reply periods under GST are short: some are as little as seven days.
2. Identify what kind of notice it is
The form number tells you what the department wants and how much time you have. Some of the most common ones:
| Form | What it is about | Usual time to respond |
|---|---|---|
| GSTR-3A | Return not filed by the due date | File the return within 15 days |
| ASMT-10 | Discrepancies found during scrutiny of returns | Reply in ASMT-11 within 30 days, or the period allowed |
| DRC-01B | Tax liability in GSTR-1 higher than tax paid in GSTR-3B | Pay or explain in Part B within 7 days |
| DRC-01C | ITC claimed in GSTR-3B higher than ITC in GSTR-2B | Pay or explain in Part B within 7 days |
| REG-17 | Proposal to cancel registration | Reply in REG-18 within 7 working days |
| DRC-01A | Intimation of tax ascertained, before a show cause notice | As stated in the intimation |
| DRC-01 | Show cause notice proposing a demand | Reply in DRC-06 within the period stated |
| ADT-01 | Audit by the department | Produce records as directed |
Always go by the date mentioned in the notice itself. Where it differs from the general rule, the notice is what the officer will hold you to.
3. Check that the notice is genuine
Fake GST notices sent by email or post are not unheard of. Confirm that the notice is visible on the portal under your login. Notices from central tax officers carry a Document Identification Number (DIN), which can be verified on the CBIC website. Check that the GSTIN, legal name and tax period are yours.
4. Gather your records before replying
A reply is only as strong as the documents behind it. For the period in question, keep these ready:
- GSTR-1, GSTR-3B and the annual return (GSTR-9 / 9C, where applicable)
- GSTR-2A and GSTR-2B statements
- Sales and purchase registers, and the ledgers relevant to the issue
- Tax invoices, debit and credit notes, and e-way bills
- Proof of payment to suppliers, where ITC is questioned
- Your earlier replies and correspondence on the same issue, if any
5. Reconcile and find the real reason for the difference
Most notices come from automated comparisons: GSTR-1 against GSTR-3B, GSTR-3B against GSTR-2B, or returns against e-way bills. Before drafting a reply, work out exactly why the figures differ. Common genuine reasons include:
- Invoices reported in one month but tax paid in another
- Amendments or credit notes reported in a later period
- A supplier filing GSTR-1 late, so the ITC appears in a later GSTR-2B
- Typing errors or wrong classification in a return
If the difference is genuine and explainable, a reconciliation statement with supporting documents usually settles the matter. If tax is actually short-paid, it is often better to accept it early.
6. Decide: pay, or reply and contest
Where the liability is correct, it can be paid voluntarily through Form DRC-03 along with interest, and the payment details given in the reply. In cases not involving fraud, paying tax and interest at an early stage can reduce or eliminate penalty.
Where you disagree, the reply should:
- Address each point raised in the notice, one by one
- Give figures that tie to the returns and books
- Attach the reconciliation and supporting documents as annexures
- Refer to the relevant provisions, circulars or judgments where a legal point is involved
- Ask for a personal hearing if a demand is proposed
A short, generic reply such as "the difference is due to a clerical error" rarely closes a notice. Specific figures and documents do.
7. File the reply on time and keep proof
File the reply in the correct form on the portal and download the acknowledgement. If more time is genuinely needed, apply for an extension before the due date, giving reasons. Before a demand order is passed, you are entitled to a hearing on request, and adjournments are limited to three, so attend hearings with your documents ready.
8. If an adverse order is passed
An order is not the end of the road. Errors apparent on the record can be corrected through rectification. Otherwise, an appeal can be filed before the Appellate Authority within three months of the order being communicated, on payment of a pre-deposit of 10% of the disputed tax. Filing an appeal within time keeps the rest of the demand from being recovered while the appeal is pending.
Key takeaway: note the deadline on day one, understand exactly what the notice is asking, and reply with reconciled figures and documents. Most GST notices can be closed at the reply stage if handled carefully.