GST Notices

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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.

Valid Modes to Send GST Notices

As per Section 169 of the CGST Act, specific modes have been prescribed for the valid service of GST notices. Any notice or communication sent through a method not listed under this section will not be considered valid under GST law.

Taxpayers should be aware of the legally recognized modes of communication, which include:

Hand delivery: Directly handing over the notice to the taxpayer or their representative, either personally or via courier/messenger
Registered or Speed Post: Sending the notice to the taxpayer’s last known business address through registered post, speed post, or courier with acknowledgment due.
Email Communication: Sending the notice to the taxpayer’s registered email address.
GST Portal: Uploading the notice to the taxpayer’s account on the GST portal, making it accessible after logging in.
Newspaper Publication: Publishing the notice in a local newspaper widely circulated in the area of the taxpayer’s last known residence.
Affixing Notice: If other modes are not possible, affixing the notice at a prominent place at the taxpayer’s last known place of business or residence. If deemed insufficient, a copy may also be posted on the notice board of the concerned GST officer’s office.

Any communication received through modes not specified under the GST law need not be acted upon by the taxpayer, as such notices hold no legal standing.

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

In the below table, we have listed out the varieties of GST notices, description, action to be taken, time limit to respond and effects of not responding.

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