GST · Notices, demands and appeals
How do I reply to a GST show cause notice (DRC-01)?
Short answer
File the reply in form DRC-06 on the GST portal within the time given in the notice, usually 30 days, with documents for every point. Ask for a personal hearing. If you accept part of the demand, pay it with interest through DRC-03: for periods from FY 2024-25, paying tax and interest within 60 days of a non-fraud notice ends the case without penalty.
Know which notice you have
| Form | What it is |
|---|---|
| ASMT-10 | Scrutiny of returns: the officer lists discrepancies and asks for an explanation (reply in ASMT-11) |
| DRC-01A | Pre-show-cause intimation: an opportunity to pay or object before a formal notice |
| DRC-01 | Show cause notice: the formal proposal of tax, interest and penalty, with reasons |
The notice states the section it is issued under. For periods up to FY 2023-24 that is section 73 (no fraud) or section 74 (fraud, suppression or wilful misstatement). For FY 2024-25 onwards both are replaced by section 74A.
Steps for replying
- Note the date of the notice and the time allowed, usually 30 days, and check that it was issued within the time limit. Under section 74A, the notice must be issued within 42 months from the due date of the annual return for the year.
- Get the full set of documents relied on. If they were not supplied, ask for them in writing.
- Prepare the facts. Reconcile returns, books, GSTR-2B and e-way bill data for the period in question.
- Answer every allegation on facts and on law, with documents, case law and circulars. Raise any preliminary objections (time limit, jurisdiction, a notice without proper reasons) as well as the merits.
- File the reply in DRC-06 on the portal, and ask for a personal hearing. A hearing must be given before an adverse order.
- Pay what you accept through DRC-03 (linked to the notice), with interest, to stop interest running and to reduce penalty.
Penalty if you pay early (section 74A, FY 2024-25 onwards)
| Case | Pay tax and interest | Penalty |
|---|---|---|
| No fraud | Within 60 days of the notice | Nil; proceedings end |
| Fraud or suppression | Before the notice / within 60 days of the notice / within 60 days of the order | 15% / 25% / 50% of the tax |
Otherwise the penalty is 10% of the tax (minimum ₹10,000) in non-fraud cases, and 100% of the tax in fraud cases.
After the order
The order (DRC-07) must normally be passed within 12 months of the notice under section 74A. If you disagree, appeal to the Appellate Authority within three months, with a pre-deposit of 10% of the disputed tax. A reply format for show cause notices is in our formats library.
Legal basis
- Sections 73 and 74, CGST Act, 2017 (FY 2017-18 to FY 2023-24)
- Section 74A, CGST Act, 2017 (FY 2024-25 onwards)
- Section 75, CGST Act, 2017 (hearing and order)
- Rule 142, CGST Rules, 2017 (forms DRC-01A, DRC-01, DRC-03, DRC-06)
Official sources
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