CA Desk

GST Notices Response

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.

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Overview Types of GST Notice Reasons Documents Required Valid modes
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.  

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 noName of the Form- NoticeDescriptionReply or Action to be takenTime limit to respondConsequence of non-response
1GSTR-3ADefault notice to non-filers of GST returns in GSTR-1 or GSTR-3B or GSTR-4 or GSTR-8File the particular GST Returns, that is yet to be filed along with late fees for the delay and interest on the GST liability, if any15 days from the date of receiving noticeTax 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.
2CMP-05Show cause notice – Questioning the eligibility to be a composition dealerMust justify reasons as to why the taxpayer should continue to be eligible for the composition scheme15 days of receipt of the noticeThe penalty stipulated under section 122 and order in CMP-07 denying the benefit of composition scheme
3REG-03At 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 registrationReply letter in REG-04 with clarification or the informationWithin 7 working days from the date of receiving the noticeReject such application and inform the applicant electronically in REG-05.
4REG-17Show cause notice why should the GST registration not be cancelled for the reasons laid down in the noticeReply letter in REG-18 with the reasons for non-cancellation of GST registrationWithin 7 working days from the date of receiving the noticeCancellation of GST registration in REG-19
5REG-23Show cause notice why the cancellation of GST registration must be revoked, for the reasons laid down in the noticeReply letter in REG-24Within 7 working days from the date of receiving the noticeCancellation of GST Registration will be revoked
6REG-27In 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 thereinReply by applying in REG-26 and appear before the tax authority giving reasonable opportunity to be heardNone prescribedIssue the cancellation of provisional registration in REG-28
7PCT-03Show cause notice for misconduct by the GST practitionerReply within the time prescribed in the show cause noticeWithin the time prescribed in the show cause noticeOrder the cancellation of the license as GST practitioner
8RFD-08Show cause notice as to why the GST refund must not be made to the applicant (taxpayer)Reply letter in RFD-09Within 15 days of receipt of noticeMake an order in RFD-06 for rejecting the GST Refund application
9ASMT-02Notice for Seeking Additional Information for provisional assessment under GSTReply in ASMT-03 along with documentsWithin 15 days from the date of service of this noticeApplication for provisional assessment may be rejected
10ASMT-06Notice for seeking additional information for Final assessment under GST (for those who applied for provisional assessment)Reply in 15 days of receipt of the noticeWithin 15 days from the date of receipt of this noticeASMT-07 can be passed without considering the views of taxpayer being assessed
11ASMT-10Scrutiny 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 anyReply in ASMT-11 giving reasons for discrepancies in the GST returnsWithin 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 notifiedProceed to assess the taxpayer based on information at hand – may lead to prosecution and penalty
12ASMT-14Show Cause Notice for assessment under section 63- reasons for conducting the assessment on the best judgment basisReply in written form and appear before the GST authority issuing the noticeWithin 15 days of noticeAssessment order in ASMT-15, may not be favouring the assessee
13ADT-01Notice for conducting audit by Tax authority under Section 65Attend in person as directed in the notice or produce recordsWithin the time prescribed in the noticeIf not, it is presumed that taxpayer does not possess books of accounts and proceedings will be initiated
14RVN-01Notice 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 108Reply within the prescribed time and/or appear before the GST authority passing the order of revision on a given date and timeWithin 7 working days from the date of service of the noticeThe case will be decided ex parte on the basis of available records and on merits
15Notice of Enquiry by Directorate of Anti-profiteeringWhere 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 anyAs may be specified in the noticeProceedings will be initiated ex parte on the basis on available evidence.
16DRC-01Show 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-02Reply 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 limitWithin 30 days of receipt of the noticeOrder 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
17DRC-10   And   DRC-17Notice 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 decreeMust be able to pay the outstanding demand as per DRC-09As 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 noticeProceed to e-auction and sale
18DRC-11Notice to the successful bidderPay the full bid amountWithin the 15 days from the date of the auctionThe proper officer can conduct a re-auction
19DRC-13Notice of Recovery of outstanding tax from a third personDeposit the amount specified in the notice and reply in DRC-14Not applicableDeemed to be a defaulter in respect of the amount specified in the notice and can be subject to prosecution and penalties
20DRC-16Notice for attachment and sale of immovable/movable goods/shares under section 79A 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 invalidNot applicableAny contravention of the notice can invite prosecution and/or penalties
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-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.
Documents required to reply to an Income Tax Notice

The Documents are required to vary with the type of Income Tax notice that is served to the taxpayer. The basic documents needed to reply to an income tax notice would be:

  • The Income Tax Notice copy.
  • Proof of Income source such as (Part B ) of Form 16, Salary receipts, etc.
  • TDS certificates, Form 16 (Part A)
  • Investment Proof if they are applicable.

But it is always better to review the notice from the Tax experts only. Therefore, once the Income-tax notice copy is uploaded, the tax experts will review the same and come up with the best probable solution. Based on this you can ask for the necessary documents. You can send a copy of the Income Tax Notice and questions to CA Desk.

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.

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