GST Notices

GST Notices are official communications from GST Authorities to taxpayers. They serve to remind or caution taxpayers about detected defaults in GST compliance or to request additional information. Responding promptly to these notices within the specified timeframe is crucial. Failure to do so may result in legal consequences such as prosecution or penalties for willful default. Hence, taxpayers must handle GST notices diligently and ensure compliance.

At IndiaFilings, our team of experts is dedicated to helping you navigate the complexities of GST notices. Whether you've received a notice or anticipate one, we're here to assist you in preparing and submitting your response effectively.

Contact us today for professional guidance and file a quick reply!

What is GST Notice?

Notices under GST serve as official communications from GST Authorities to taxpayers. These notices serve various purposes, including reminders of detected defaults in compliance with GST laws or requests for additional taxpayer information. They are crucial in maintaining tax compliance and ensuring the proper functioning of the GST system.

These notices may go by different names, the specific type of notice depends on factors such as the nature of the default detected or the actions required from the taxpayer. Common grounds for receiving notices include failure to register under GST when required by law, late or non-filing of GST returns, underpayment or non-payment of GST, and incorrect claims of Input Tax Credit. Upon receiving a notice, taxpayers must respond promptly within the specified timeframe.

Types of GST Notices

As mentioned above, in the context of Goods and Services Tax (GST) in India, taxpayers may receive various notices from the tax authorities. Some common types include:

  • Show Cause Notice (SCN): This is issued by the tax authorities to a taxpayer when they suspect that there has been a violation of GST laws or incorrect reporting of transactions. The taxpayer must provide a valid explanation or justification within a specified period.
  • Demand Notice: A demand notice is issued when the tax authorities determine a tax liability due from the taxpayer. This notice specifies the amount of tax due along with any applicable interest or penalties.
  • Scrutiny Notice: A scrutiny notice is sent to a taxpayer when the tax authorities examine the taxpayer's GST returns or other documents in detail to ensure compliance with GST laws. This may involve a thorough examination of the taxpayer's records and transactions.
  • Assessment Notice: This notice is issued by the tax authorities after assessing the taxpayer's GST liability based on the information provided in the GST returns and any other relevant documents. It specifies the final amount of tax liability, including any adjustments or corrections made by the tax authorities.
  • Recovery Notice: If a taxpayer fails to pay the tax liability as per the demand notice, a recovery notice may be issued, specifying the outstanding amount and initiating steps for recovery, including attachment of assets or bank accounts.
  • Notice for Personal Hearing: In certain cases, the tax authorities may summon the taxpayer for a personal hearing to present their case or provide additional information in response to any discrepancies or issues identified during the assessment or scrutiny process.

Taxpayers must respond to these notices promptly and provide accurate information and documents as required by the tax authorities to avoid any adverse consequences, such as penalties or prosecution for non-compliance.

Common Reasons for Receiving GST Notices

Below are the primary reasons why GST authorities might issue notices:

  • Discrepancies between details reported in GSTR-1 and GSTR-3B lead to a scrutiny notice.
  • Variances in Input Tax Credit (ITC) claims in GSTR-3B compared to GSTR-2B/2A.
  • Failing to file GSTR-1 and GSTR-3B for over six months consecutively.
  • Mismatches in information declared on GSTR-1 and the e-way bill portal.
  • Prices are not lowering following a GST rate cut as mandated by the Central Board of Indirect Taxes and Customs (CBIC), constituting profiteering and violating consumer rights to benefit from reduced rates.
  • Non-payment or underpayment of GST, potentially leading to a show cause notice (SCN), regardless of fraudulent intent.
  • Inappropriate claims for GST refunds, with or without fraudulent intent, attracting a show cause notice (SCN).
  • Incorrect availing or use of Input Tax Credit.
  • Operating without GST registration when required and not fulfilling tax and other obligations under the GST Act.
  • Reporting inconsistencies for exports in GSTR-1, especially when shipping or export bills are lodged in ICEGATE but not reflected in GSTR-1.
  • Failure to provide required record-keeping information to tax authorities.
  • Undergoing audits conducted by tax authorities.
  • Not submitting information returns to tax authorities within the prescribed timeframe.

Comprehensive Overview of GST Notices and Required Responses

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, GSTR-3B, GSTR-4, or GSTR-8 File the pending GST Returns along with any late fees and interest on the GST liability 15 days from receipt Tax assessed on available information; Penalty of Rs. 10,000 or 10% of tax due, whichever is higher
2 CMP-05 Show cause notice questioning the eligibility for the composition scheme Justify eligibility for the composition scheme 15 days from receipt Penalty under section 122 and CMP-07 order denying composition scheme benefits
3 REG-03 Notice for clarification or additional documents at the time of GST registration or amendment Provide clarification or documents in REG-04 Within 7 working days from receipt Application rejection informed in REG-05
4 REG-17 Show cause notice for potential GST registration cancellation Submit reasons in REG-18 against cancellation Within 7 working days from receipt Cancellation of GST registration in REG-19
5 REG-23 Show cause notice for revocation of GST registration cancellation Submit reply in REG-24 Within 7 working days from receipt Cancellation of GST registration revocation
6 REG-27 Notice for GST migration issues for VAT regime taxpayers Apply in REG-26 and present before tax authority Not prescribed Cancellation of provisional registration in REG-28
7 PCT-03 Show cause notice for GST practitioner misconduct Respond within the notice's prescribed time Within the notice's prescribed time Cancellation of GST practitioner license
8 RFD-08 Show cause notice for potential GST refund rejection Respond in RFD-09 Within 15 days from receipt GST refund application rejection in RFD-06
9 ASMT-02 Notice for additional information for provisional assessment Provide information in ASMT-03 Within 15 days from notice service Provisional assessment application rejection
10 ASMT-06 Notice for additional information for final assessment (post-provisional assessment) Respond within 15 days Within 15 days from receipt Final assessment in ASMT-07 without taxpayer input
11 ASMT-10 Scrutiny notice for discrepancies in GST return Provide explanations in ASMT-11 Prescribed time in notice or a max of 30 days from service Assessment based on available information, potential prosecution and penalty
12 ASMT-14 Show cause notice for best judgment assessment under section 63 Provide written reply and appear before authority Within 15 days from notice Unfavorable assessment order in ASMT-15
13 ADT-01 Notice for audit by Tax authority under Section 65 Appear in person or produce records as directed Within the notice's prescribed time Presumed absence of books of account, initiating proceedings
14 RVN-01 Revisional authority notice under section 108 before revising appeal orders Respond and/or appear as directed Within 7 working days from service Decision based on available records and merits, ex parte
15 Notice of Enquiry by Directorate of Anti-profiteering Inquiry for not passing on ITC or reduced GST rates benefits Cooperate and provide evidence As specified in the notice Ex parte proceedings based on available evidence
16 DRC-01 Demand of Tax show cause notice for underpaid or unpaid tax Pay demanded tax amount in DRC-03, with interest and penalty if applicable. Use DRC-06 for responses Within 30 days from receipt Higher penalty or prosecution within three years from annual return due date
17 DRC-10 & DRC-17 Notice of Auction of Goods under section 79 for recovery Pay outstanding demand per DRC-09 Specified before sale, not before 15 days from notice issue Proceed to e-auction and sale
18 DRC-11 Notice to successful auction bidder Pay total bid amount Within 15 days from auction date Possible re-auction by officer
19 DRC-13 Notice for tax recovery from a third person Deposit specified amount and respond in DRC-14 Not applicable Considered a defaulter for specified amount, subject to prosecution and penalties
20 DRC-16 Notice for attachment and sale of goods/shares under section 79 Prohibited from transferring/creating charge on goods; must comply with notice Not applicable Prosecution and/or penalties for contravention

Reply to GST Notices

To navigate the process of responding to GST notices efficiently, follow these essential steps:

  • Review the Notice: Carefully read the GST notice to understand the issue or discrepancy highlighted by the tax authorities.
  • Gather Documentation: Collect all relevant documents, records, and evidence that pertain to the matter raised in the notice.
  • Access the GST Portal: Log in to the GST portal to prepare your response. Ensure you have the necessary login credentials and access rights.
  • Use Digital/E-Signature: Authenticate your submission with your digital signature or e-signature, as authorised.
  • Clear Dues: If the notice involves tax or interest dues, ensure these are paid according to the specified procedure before responding.
  • Submit Your Response: File your reply on the GST portal, attaching all necessary documentation and evidence to support your case.
  • Keep Records: Maintain a detailed record of all communications, submissions, and payments related to the GST notice for future reference.

For effective replies, IndiaFilings experts are here to guide you through the process, ensuring your response is comprehensive and compliant.

Consequences of Non-Response to GST Notices

Failure to reply to GST notices within the specified time frame subjects the taxpayer to penalties and further legal actions following GST regulations based on the individual circumstances of each case (refer to the table provided above).

Choose IndiaFilings for Simplified GST Solutions

IndiaFilings stands out as your trusted partner in navigating the complexities of GST compliance. By facilitating effortless GST registration and meticulous GSTR filing, we proactively minimise the risk of receiving unwelcome GST notices. Should you receive any notices, there's no cause for concern. Our dedicated team of GST experts is equipped to handle the situation with precision and expertise. Our experts will craft and submit a comprehensive and compliant response to any GST notices on your behalf, ensuring that your business remains in good standing with minimal disruption. With IndiaFilings, you gain more than just a service provider; you gain a partner committed to safeguarding your business's compliance and success.

Ready to ensure seamless GST compliance? Contact our experts today!

GST Notice FAQ's

What is a GST Notice?

A GST Notice is an official communication from GST Authorities to taxpayers, highlighting defaults in compliance or requesting additional information.

Why do I receive a GST Notice?

Notices can be due to discrepancies in GST filings, late or non-filing of returns, underpayment of taxes, or incorrect Input Tax Credit claims, among other reasons.

What should I do upon receiving a GST Notice?

Review the notice for specifics, gather necessary documents, and respond through the GST portal within the stipulated timeframe.

How can I submit my response to a GST Notice?

Responses can be filed online via the GST portal, using a digital or e-signature for authentication.

What happens if I don't respond to a GST Notice?

Non-response can lead to penalties, legal consequences, or further enforcement actions based on the case's specifics.

Can IndiaFilings help me with GST Notices?

Yes, IndiaFilings offers expert services to help you navigate and respond effectively to GST notices.

What types of GST Notices might I receive?

Types include Show Cause Notices, Demand Notices, Scrutiny Notices, Assessment Notices, and Recovery Notices, among others.

Is there a deadline for responding to GST Notices?

Yes, each notice specifies a deadline, typically ranging from 7 to 30 days, depending on the notice type.

What if I disagree with a GST Notice?

You should still respond within the deadline, providing evidence and explanations to contest the notice. Consulting an expert is advisable.

How can I avoid receiving GST Notices?

Ensure timely and accurate GST filings, maintain proper records, and stay updated on GST regulations to minimize discrepancies.

What is a Show Cause Notice under GST?

It's a notice asking the taxpayer to explain or justify a discrepancy or violation related to GST laws.

What does a Demand Notice entail?

It outlines the tax liability owed by the taxpayer, including any interest or penalties, demanding payment.

What is the purpose of a Scrutiny Notice?

It's issued to examine the details of GST returns or documents more closely for compliance verification.

How is an Assessment Notice different?

This notice finalizes the tax liability after a thorough review of the taxpayer's filings and supporting documents.

What leads to a Recovery Notice?

Failure to settle tax liabilities as per a Demand Notice can trigger a Recovery Notice, initiating asset attachment or other recovery measures.

What entails a Notice for Personal Hearing?

It's an opportunity for taxpayers to present their case in person regarding discrepancies or issues identified by tax authorities.

Can I seek professional help for responding to notices?

Yes, professional services like IndiaFilings can provide expertise in preparing and submitting responses.

What documents might I need to respond to a GST Notice?

This could include GST returns, transaction records, invoices, and any other relevant financial documents.

How does IndiaFilings assist with GST Notices?

IndiaFilings offers expert guidance through the process, ensuring that your responses are comprehensive and compliant.

Why is timely response to GST Notices important?

Prompt action is crucial to avoid penalties and ensure that your business remains in good standing with GST regulations.

Live Chat!

We are available