The Goods and Services Tax (GST) regime in India has significantly transformed the indirect tax landscape since its rollout in July 2017. With increasing digitization, real-time reporting, and data sharing between GST, Income Tax, and Customs departments, businesses are now facing enhanced scrutiny. As a result, the issuance of GST notices—whether for mismatch, non-compliance, fraud suspicion, or audit—has become more frequent and aggressive.
Understanding the types of notices, common triggers, and formulating strategic responses is crucial for ensuring smooth operations and avoiding unnecessary litigation.
1. Common GST Notices : GST notices can be broadly categorized based on their purpose and legal authority:
| Sl. No. | Notice/Form | Form Name | Section & Rule | Brief Description |
| 5 | GSTR-3A | Notice for Non-filing of Returns | Section 46, Rule 68 | Issued to taxpayer who fails to file returns within due time. |
| 6 | GST DRC-01 | SCN for Demand of Tax | Sections 73/74, Rule 142(1) | Notice for tax short paid/unpaid, wrongly availed ITC or erroneous refund. |
| 7 | GST DRC-01A | Pre-SCN Intimation | Sections 73(5)/74(5), Rule 142(1A) | Intimation before formal SCN, allows voluntary compliance. |
| 8 | GST DRC-07 | Summary of Order | Sections 73/74, Rule 142(5) | Summary of demand/order issued post-adjudication. |
| 13 | GST ASMT-02 | Notice for Provisional Assessment | Section 60, Rule 98(2) | Officer asks for further documents/information. |
| 14 | GST ASMT-06 | Notice for Final Assessment | Section 60, Rule 98(5) | Issued before passing final assessment order post provisional assessment. |
| 15 | GST ASMT-10 | Scrutiny of Returns | Section 61, Rule 99(1) | Discrepancy noticed in filed return—explanation sought. |
| 16 | GST ASMT-14 | Best Judgment Assessment Notice | Section 63, Rule 100(2) | Assessment of non-filers or unregistered persons. |
| 19 | GST RFD-08 | SCN for Rejection of Refund | Section 54, Rule 92(3) | Issued when refund claim is proposed to be rejected. |
| 21 | Summons | Summons to Appear | Section 70 | Summons to appear and/or produce documents during proceedings. |
| 22 | Inspection Notice | Inspection/Access Notice | Section 67 | Authorizes inspection/search/seizure in case of suspected tax evasion. |
Each notice demands timely action. Failure to respond can lead to penalties, cancellation of registration, or initiation of prosecution.
2. Common triggers behind GST Notices : Understanding why notices are issued is key to preventing them. Common triggers include:
GSTR-3B vs. GSTR-1 Mismatch : Variance in output tax liability declared
GSTR-3B vs. GSTR-2A/2B Mismatch :Excess ITC claimed compared to supplier filings
Non-Filing or Late Filing of Returns :GSTR-1, GSTR-3B, GSTR-9, GSTR-9C
E-Way Bill and GSTR Data Mismatch :E-way bill generation without corresponding returns
Fake or Suspicious ITC Claim :Based on fake/fraudulent invoices
High Refund Claims : Especially in export or inverted duty structure cases
Turnover Discrepancy with ITR or TDS Returns :Cross-verification with income tax or 26AS
Abnormal Tax Credits/Adjustments : Sudden spikes in credits, reversals, or late filings
3. Anatomy of a GST Scrutiny Notice (ASMT-10) : The scrutiny of returns is conducted under Section 61 using Form ASMT-10, typically based on anomalies in filed returns.
Key Points in ASMT-10:
- Specific mismatches or inconsistencies listed
- Response timeline: 30 days (extendable by officer)
- No tax demand is raised initially
- Reply to be filed in Form ASMT-11
If issues are resolved, the officer may issue an acceptance in Form ASMT-12. If not, a Show Cause Notice (SCN) may follow.
Common Checklist Before Reply:
- Check data in GSTR-1, 3B, 2B, EWB
- Match with books of accounts
- Prepare reconciliation and explanation
- Submit evidence with Form ASMT-11
4. Handling Show Cause Notices (SCNs)
Section 73 vs. Section 74 SCNs:
- Section 73: Without fraud or suppression—no penalty if paid with interest before SCN.
- Section 74: Fraudulent intent—includes penalty of 15% to 100% of tax amount.
5. How to Respond Effectively:
Read every line carefully – SCNs often cover multiple issues.
- Check timelines – SCNs must be issued within the time limit (3/5 years).
- Prepare a structured reply with facts, legal backing, and supporting evidence.
- Attach reconciliations, invoices, ledgers, and certifications as needed.
- Request a personal hearing under natural justice principles.
A well-drafted reply, backed by facts and case laws, can help drop proceedings or reduce liabilities.
6. Notices for Audit and Special Audit
Section 65: Departmental Audit
- Prior notice issued
- Business must furnish all records: returns, invoices, e-way bills, books
- Audit report in Form ADT-02 may lead to further proceedings
7. Section 66: Special Audit
- Ordered by Commissioner; audit conducted by CA/CMA nominated by department
- Used in complex or high-value matters
- Mandatory cooperation required, otherwise penal action possible
Best Practices:
- Co-operate, maintain professional demeanour
- Submit only legally required documents
- Seek extensions in writing if needed
- Take professional help to respond to audit findings
8. Anti-evasion Notices and Summons
Section 67: Search and Seizure
- Usually based on intelligence input
- Conducted by anti-evasion or DGGI wing
- Results in seizure of records, goods, or cash
Section 70: Summons
- Issued to key personnel for investigation
- Binding and enforceable like a court summons
- Statement recorded under oath
Do’s and Don’ts:
- Appear in person or authorize qualified person
- Stay calm and truthful
- Avoid unsigned or unclear statements
- Take legal advice before and after deposition
9. Notices for Cancellation of GST Registration
Notices under Rule 22 may be issued for:
- Non-filing of returns
- Incorrect GSTIN usage
- Suppression or fraud
- Fake ITC
How to Respond:
- File pending returns with interest/penalty
- Submit response in Form REG-18 within 7 days
- Attach proof of compliance and clarification
- Attend personal hearing if granted
If cancelled, appeal can be filed within 3 months in Form GST APL-01.
10. Practical Response Strategies
General Tips:
- Maintain documented audit trail for all GST filings
- Reconcile books and returns monthly
- Respond within statutory timelines
- Take professional help for replies and litigation
- Keep record of communication with vendors for ITC validation
Technology Tools:
- Use GST reconciliation software
- Maintain e-way bill vs. sales register reports
- Auto-match GSTR-2B with purchase register
Soft Skills:
- Be courteous in correspondence
- Use structured formats for reply
- Avoid emotional or accusatory language
Conclusion
With increasing digitization and advanced analytics, GST compliance is no longer a mechanical process but a strategic area. Notices and audits should not be feared but understood and addressed proactively.
The key lies in:
- Preventing triggers through robust compliance
- Preparing defensible documentation and reconciliation
- Participating with clarity and confidence during proceedings
For professionals and businesses alike, decoding GST notices is not just about responding—it’s about transforming compliance into an opportunity for system improvement, risk reduction, and long-term credibility.
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