If you've received a GST notice, don't panic and don't ignore it. First, identify the exact form (ASMT-10, DRC-01, DRC-01A, REG-17, GSTR-3A, or another) because that decides which reply form you use and how many days you actually have. Then note the deadline (usually 15 to 30 days, though it varies by notice type), gather your GSTR-1, GSTR-3B, GSTR-2B, and invoice records for the periods mentioned, and file your reply on the GST portal (gst.gov.in) under Services > User Services > View Additional Notices and Orders. A well-documented reply filed on time is usually enough to close routine mismatches without any tax outgo. If the notice alleges fraud, involves a large demand, or you're not confident reading the legal language, get a CA to review it before you submit, because a weak first reply is far harder to undo at appeal stage than to get right the first time.
That's the short version. The rest of this page walks through why notices get issued, exactly how to reply to each common type, what a strong reply actually contains, and what happens at every stage after you submit it.
A GST notice is a formal communication from the tax department asking you to explain, correct, or defend something related to your GST compliance, a mismatch between returns, a suspected short payment, wrongly claimed input tax credit, non-filing of returns, or a query about your registration itself. It is not, by itself, a verdict. Most notices, especially the routine ones, exist because the GST Network's automated risk analytics flagged a difference between two data sets you filed yourself: GSTR-1 versus GSTR-3B, or ITC claimed in GSTR-3B versus what's visible in GSTR-2B. Receiving one means the system found something worth asking about. It does not mean you've done anything wrong.
Notices reach you in one of a few ways: as an entry under "View Additional Notices and Orders" on the GST portal (the only legally valid mode for most notice types), sometimes accompanied by an SMS or email alert that isn't always reliable, and occasionally by physical delivery for certain enforcement-wing matters. Because portal alerts can be missed, it's worth logging in and checking that section at least once a month even if you haven't received any alert, a notice you never open is still legally deemed served once it's uploaded.
Two provisions govern most demand notices in India right now, and it matters which one your notice cites. Section 73 applies where the department believes tax was short paid, or ITC wrongly claimed, for reasons other than fraud or willful suppression, this is the everyday, bona fide category most GSTR-1/GSTR-3B mismatch notices fall under, and the maximum penalty is capped around 10% of the tax (or ₹10,000, whichever is higher). Section 74 applies where the department alleges fraud, willful misstatement, or deliberate suppression of facts, and the maximum penalty can run up to 100% of the tax involved. From FY 2024-25 onward, a new unified provision, Section 74A, replaces both sections. It removes the old fraud/non-fraud split for the purpose of the notice timeline and sets a single window of 42 months from the due date of the annual return for issuing a demand notice, with a 60-day (up from 30-day) reduced-penalty window if you pay before the case is adjudicated. Sections 73 and 74 continue to apply to periods up to FY 2023-24; they are not retrospectively replaced.
If your notice cites Section 74 but the underlying facts look like an ordinary reconciliation gap rather than actual fraud, that classification itself is something worth challenging in your reply. The section under which a notice is framed drives both the penalty ceiling and the burden of proof, so getting that classification corrected can matter more than the underlying numbers.
This page is written for GST-registered proprietors, partnerships, LLPs, and companies in India who have received any notice on the GST portal and need to understand what it means and how to respond, whether that's a routine ASMT-10 scrutiny notice for a GSTR-1/GSTR-3B mismatch, a formal DRC-01 show cause notice, a non-filer notice under Section 46, or a proposed registration cancellation under REG-17. It's equally useful if you're trying to understand the reply process in general (which form goes with which notice, how the portal reply flow works, what the deadlines are) before you've even opened your specific notice.
If your notice comes from the Directorate General of GST Intelligence (DGGI) or an anti-evasion wing, involves search and seizure under Section 67, or alleges a large-scale fake invoicing racket, the stakes and the reply strategy are materially different from a routine scrutiny or demand notice, and you should be speaking with a GST litigation specialist directly rather than working from a general guide like this one. Similarly, if you've already received a final demand order (DRC-07) rather than a show cause notice, your remedy is an appeal under Section 107, not a fresh reply, see the section on that below.
If you'd rather have this reviewed by a professional than file it solo, especially once real money or a fraud allegation is involved, LegalDev's GST notice reply assistance covers reconciliation, reply drafting, and portal filing end to end.
This deserves its own walkthrough because it's by far the most frequent reason ordinary, compliant businesses end up with a scrutiny or demand notice. GSTR-1 reports your outward supplies invoice by invoice; GSTR-3B is your summary return where you actually pay tax. When the total taxable value in GSTR-1 doesn't match GSTR-3B for the same period, the system flags it automatically, well before any human officer looks at your file.
In our experience, the underlying cause is rarely deliberate. It's usually one of: a credit note issued but not adjusted in the same period, a debit note or amendment made in GSTR-1 in a later month than when the original supply happened, an invoice value entered incorrectly in one return but not the other, or genuine timing differences where a supply crosses a return period. None of these require you to simply accept the demand as stated.
To reply to this specific type of mismatch:
If the officer is satisfied, a scrutiny notice (ASMT-10) closes with an order in Form ASMT-12, stating the matter is dropped and no further action is needed. A demand notice (DRC-01) that's resolved in your favour, or where you've paid the accepted portion, typically ends without a further order, or with the case marked closed on the portal.
If the officer isn't satisfied, or if your reply is incomplete, the matter can escalate: a scrutiny notice can turn into a full show cause notice (DRC-01) under Section 73/74/74A; a demand notice proceeds to adjudication, usually after a personal hearing if one was requested, and ends with a final order in Form DRC-07. A DRC-07 is not a notice anymore, it's a demand order, and your remedy at that point shifts from "reply" to "appeal."
You can appeal a DRC-07 (or most other adverse GST orders) to the Appellate Authority under Section 107 of the CGST Act, using Form APL-01 on the portal, under Services > User Services > My Applications. The filing window is three months from the date the order is communicated to you, with a further one-month extension available if you can show sufficient cause for the delay, beyond that four-month outer limit, the appeal generally cannot be entertained. Filing requires a mandatory pre-deposit: the full admitted amount of tax, interest, and penalty, plus 10% of the remaining disputed tax (capped at ₹20 crore), paid from your electronic cash ledger via Form PMT-06. Once the pre-deposit is made, recovery of the balance disputed amount is automatically stayed while the appeal is pending. If the first appeal doesn't go your way, a further appeal lies to the GST Appellate Tribunal (GSTAT) under Section 112, with an additional 10% pre-deposit on the remaining disputed amount.
For scrutiny and demand notices, the department can proceed to determine your liability without your input and pass an order confirming its own assessment, an ex-parte order. For non-filers specifically, Section 62 lets the officer make a best-judgment assessment based on whatever data is available (your GSTR-1, GSTR-2A/2B, e-way bills, past filing history), without a hearing. If you file a valid return within 60 days of that assessment order, it's deemed withdrawn, though interest and late fees still apply. Beyond that window, the assessment generally stands, and courts have consistently held that the remedy at that point is an appeal, not a fresh return. Either way, an ex-parte order confirms the department's version of events with no benefit of the doubt, which is precisely why replying on time, even a modest, honest reply, is worth far more than the effort it takes.
There's no government fee to reply to a GST notice yourself; filing on the portal costs nothing beyond whatever tax and interest you may owe on genuinely accepted discrepancies. What varies is time and, if you engage help, professional fees. A straightforward ASMT-10 reply for a single mismatch, once your reconciliation is ready, can realistically be drafted and filed within a day or two. A DRC-01 show cause notice involving multiple tax periods, larger amounts, or a fraud allegation takes meaningfully longer to prepare properly and often benefits from a CA's review before filing, since a weak first reply is much harder to walk back once an adjudication order is passed than it would have been to get right at the reply stage.
Most pages ranking for this topic either reproduce the GST portal's own user-guide language nearly verbatim, or stack a list of notice types without walking through what an actual reply document should say and how the numbers should be presented to an officer. This page is built the other way round: from the reconciliation outward. The GSTR-1/GSTR-3B mismatch walkthrough above reflects the pattern we typically see across client notices, timing differences and credit-note adjustments accounting for most of the gap, not fraud, and a reply that shows the officer exactly where the numbers reconcile is what actually closes these cases quickly. If you'd rather have that reconciliation and reply built by someone who does this regularly than assemble it yourself from a guide, that's what our GST notice reply service is for.
A GST notice is a formal communication from the tax department asking you to explain a discrepancy, file a missing return, or respond to a proposed action like registration cancellation. Most routine notices are triggered automatically when the system compares your own filed returns (GSTR-1 vs GSTR-3B, or ITC claimed vs GSTR-2B) and finds a mismatch; it doesn't mean you've necessarily done anything wrong.
It depends on the notice type. A scrutiny notice (ASMT-10) and a show cause notice (DRC-01) both typically give 30 days. A non-filer notice (GSTR-3A) gives 15 days. A proposed registration cancellation (REG-17) gives only 7 days. Always check the specific deadline printed on your notice rather than assuming a standard number.
Section 73 covers non-fraud cases, short payment, wrong ITC, or errors, where the maximum penalty is around 10% of the tax. Section 74 applies where the department alleges fraud, willful misstatement, or suppression of facts, with a maximum penalty of up to 100%. If your notice cites Section 74 but the facts look like an ordinary error, that classification is worth challenging in your reply.
Section 74A is a new, unified provision that replaces both Section 73 and Section 74 for demands relating to FY 2024-25 onward. It sets a single 42-month window (from the annual return due date) for issuing a demand notice, regardless of whether fraud is alleged, and extends the reduced-penalty payment window from 30 to 60 days. Notices for FY 2023-24 and earlier still fall under the old Section 73/74 framework.
Log in to the GST portal at gst.gov.in and go to Services > User Services > View Additional Notices and Orders. Notices don't always trigger a reliable SMS or email alert, so it's worth checking this section directly at least once a month, even without a notification.
ASMT-10 is a preliminary scrutiny notice under Section 61; it's an inquiry, not a demand, and there's no personal hearing at this stage. DRC-01 is a formal show cause notice under Section 73, 74, or 74A that actually quantifies a tax demand. A poorly handled ASMT-10 can escalate into a DRC-01, which is why replying properly at the scrutiny stage matters.
Log in, open the notice under View Additional Notices and Orders, reconcile your records for the periods mentioned, pay any accepted amount via DRC-03, draft a point-by-point written reply, and file it in the matching form (ASMT-11, DRC-06, REG-18, or REG-04) under the Replies tab, verified with DSC or EVC. Save the ARN as proof of filing.
At minimum: GSTR-1 and GSTR-3B for the periods mentioned, GSTR-2B, relevant sales and purchase invoices, credit/debit notes, a reconciliation statement explaining each discrepancy, and proof of any DRC-03 payment made. For a demand notice involving larger amounts, supporting contracts or agreements may also help.
Yes, in most cases. You can request additional time through the reply form itself, before the original deadline expires. Extensions of 7 to 15 days are commonly granted. Requests made after the deadline has already passed are rarely accepted, so file for an extension early if you need one.
The officer can proceed without your input. For scrutiny and demand notices, this usually means an order confirming the department's own assessment, with none of your explanation considered. For non-filers, Section 62 allows a best judgment assessment based on whatever data is available. Ignoring a notice is consistently the outcome that costs the most time and money to undo later.
Not always. A straightforward scrutiny notice for a genuine reconciliation gap can often be handled directly if you're comfortable reading your own GST returns. For a show cause notice involving real money, a fraud allegation, or multiple tax periods, professional review before filing is worth it, an adjudication order is far harder to reverse than a reply is to get right.
DRC-03 is the form used to make a voluntary payment against a GST notice, whether you're accepting a discrepancy in full, in part, or simply want to pay proactively before a formal demand is raised. It's what links your payment to a specific notice, rather than it disappearing into a routine monthly GSTR-3B adjustment.
Build a month-by-month comparison of GSTR-1 and GSTR-3B values for the periods flagged, identify exactly which invoices, credit notes, or amendments explain each gap, pay any genuine shortfall with interest via DRC-03, and submit a reply that maps each rupee of difference to a specific document rather than offering a general explanation.
DRC-06 is the reply form for a formal show cause notice issued in DRC-01 (or the pre-notice intimation DRC-01A) under Section 73, 74, or 74A. ASMT-11 is the reply form specifically for an ASMT-10 scrutiny notice under Section 61. Using the wrong form means your reply may not be recognised against the right proceeding.
Yes, for demand notices under Section 73/74/74A, Section 75(4) of the CGST Act entitles you to a personal hearing before an adverse order is passed, either if you request it in your written reply or if the order is going to go against you. Explicitly asking for a hearing in your reply is important; not doing so can be read as waiving that right.
Under Section 73, the penalty is generally capped around 10% of the tax involved (or ₹10,000, whichever is higher), and it can be reduced further if you pay before or shortly after the notice. Under Section 74, penalties can go up to 100% of the tax involved, reflecting the fraud or suppression allegation the section is meant to address.
State your disagreement clearly in your reply, with supporting documents and a specific explanation for each contested line item, rather than a general denial. If the demand is confirmed anyway in a final order (DRC-07), your remedy shifts to filing an appeal under Section 107 within three months, with a 10% pre-deposit of the disputed amount.
If the officer accepts it, scrutiny notices close with an ASMT-12 order, and demand notices are typically dropped or resolved without further proceedings. If the reply doesn't satisfy the officer, the matter can proceed to a formal show cause notice, a personal hearing, and ultimately a demand order in Form DRC-07, which then becomes appealable.
Yes. File Form APL-01 with the Appellate Authority under Section 107 within three months of the order being communicated (one further month is condonable for sufficient cause). You'll need to pay any admitted amount in full plus 10% of the remaining disputed tax as a pre-deposit before the appeal can be filed.
No. They come from different departments, under entirely different laws- the CGST Act versus the Income Tax Act- and use different forms, portals, and reply procedures. If you've received both, they need to be handled as separate matters. See our guide on income tax notice response if that's what you're dealing with as well.
DRC-01A is a pre-show-cause intimation, issued under Rule 142(1A), giving you a chance to pay the tax voluntarily before a formal DRC-01 show cause notice is issued. It's not mandatory to respond, but paying at this stage (or replying to contest it) can avoid the case escalating to a full SCN and a higher penalty exposure. It's replied to using the same DRC-06 form as a DRC-01.