GST notices serve as formal communications between tax authorities and taxpayers. These notices highlight compliance issues, request clarifications, or demand action to rectify discrepancies. Common grounds for receiving GST notices include:
- Failure to register under GST when required.
- Late or non-filing of GST returns.
- Underpayment or non-payment of GST.
- Incorrect Input Tax Credit (ITC) claims.
Taxpayers must handle GST notices diligently, responding promptly to avoid adverse legal outcomes.
Types of GST Notices
- Show Cause Notice (SCN): Issued when authorities suspect a violation of GST laws. Requires a valid explanation or rectification within a specified period.
- Demand Notice: Specifies tax dues, including applicable penalties and interest.
- Scrutiny Notice: Issued to examine GST returns or records for compliance.
- Assessment Notice: Details tax liabilities assessed by authorities.
- Recovery Notice: Initiates recovery steps for unpaid taxes, including asset attachment.
- Notice for Personal Hearing: Summons taxpayers to address discrepancies or provide additional information.
Common Reasons for GST Notices
Tax authorities may issue notices for several reasons, including:
- Discrepancies between GSTR-1 and GSTR-3B filings.
- Variances in ITC claims compared to GSTR-2B/2A.
- Non-filing of GST returns for more than six months.
- Mismatches between GSTR-1 and e-way bill portal data.
- Incorrect claims of refunds or ITC.
- Non-payment or underpayment of GST.
- Operating without mandatory GST registration.
- Failure to provide required records or cooperate during audits.
Comprehensive Overview of GST Notices and Required Responses
| Sl. No. | Name of the Form/Notice | Description | Reply or Action Required | Time Limit to Respond | Consequences of Non-response |
|---|---|---|---|---|---|
| 1 | GSTR-3A | Default notice for non-filing of GST returns in GSTR-1, GSTR-3B, GSTR-4, or GSTR-8. | File pending GST Returns along with applicable late fees and interest. | 15 days from receipt. | Tax assessed based on available information; penalty of ₹10,000 or 10% of tax due. |
| 2 | CMP-05 | Show cause notice questioning eligibility for the composition scheme. | Justify eligibility for the composition scheme. | 15 days from receipt. | Penalty under Section 122; denial of composition scheme benefits via CMP-07. |
| 3 | REG-03 | Notice for clarification or additional documents during registration. | Provide clarification or documents in REG-04. | 7 working days from receipt. | Application rejection communicated in REG-05. |
| 4 | REG-17 | Show cause notice for potential GST registration cancellation. | Submit reasons in REG-18 against cancellation. | 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. | 7 working days from receipt. | GST registration revocation remains effective. |
| 6 | REG-27 | Notice for migration issues from VAT to GST. | Apply in REG-26 and present to tax authority. | Not prescribed. | Cancellation of provisional registration in REG-28. |
| 7 | PCT-03 | Show cause notice for GST practitioner misconduct. | Respond as per notice requirements. | Within the prescribed time. | GST practitioner license cancellation. |
| 8 | RFD-08 | Show cause notice for potential GST refund rejection. | Respond in RFD-09. | 15 days from receipt. | Refund application rejection in RFD-06. |
| 9 | ASMT-02 | Notice requesting additional information for provisional assessment. | Provide information in ASMT-03. | 15 days from notice service. | Rejection of provisional assessment application. |
| 10 | ASMT-06 | Notice for additional information for final assessment. | Respond within 15 days. | 15 days from receipt. | Final assessment in ASMT-07 without taxpayer input. |
| 11 | ASMT-10 | Scrutiny notice for discrepancies in GST returns. | Provide explanations in ASMT-11. | Prescribed in the notice (max 30 days). | Assessment based on available information; penalties may apply. |
| 12 | ASMT-14 | Show cause notice for best judgment assessment under Section 63. | Provide written reply and appear before authority. | 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. | Prescribed in the notice. | Proceedings initiated based on presumed absence of records. |
| 14 | RVN-01 | Revisional authority notice under Section 108 before revising appeal orders. | Respond and/or appear as directed. | 7 working days from service. | Decision based on available records and merits (ex parte). |
| 15 | Directorate of Anti-profiteering | Inquiry notice for not passing on benefits of ITC or GST rate reductions. | Cooperate and provide evidence as specified. | Prescribed in the notice. | Proceedings based on available evidence (ex parte). |
| 16 | DRC-01 | Demand notice for underpaid or unpaid tax. | Pay dues in DRC-03 or respond via DRC-06. | 30 days from receipt. | Higher penalty or prosecution initiated within three years of the due date. |
| 17 | DRC-10 & DRC-17 | Notice of auction of goods under Section 79 for recovery. | Pay outstanding demand in DRC-09. | Specified before auction; minimum 15 days. | Proceed to e-auction or asset sale. |
| 18 | DRC-11 | Notice to successful bidder in an auction. | Pay total bid amount. | 15 days from auction date. | Re-auction by the tax officer. |
| 19 | DRC-13 | Notice for tax recovery from a third party. | Deposit specified amount and respond in DRC-14. | Not applicable. | Third party treated as a defaulter and subject to penalties or prosecution. |
| 20 | DRC-16 | Notice for attachment and sale of goods/shares under Section 79. | Comply with the notice and refrain from transferring assets. | Not applicable. | Prosecution or penalties for contravention. |
Steps to Respond to GST Notices
- Analyze the Notice: Understand the issue raised by authorities.
- Gather Documentation: Collect supporting records and evidence.
- Access the GST Portal: Prepare and submit your response online.
- Clear Dues: Pay taxes or penalties, if applicable, before responding.
- Submit Your Reply: Attach all documentation and file your reply through the portal.
- Maintain Records: Keep detailed records of all communications and submissions.
At BeyondYourFinance, we simplify this process by preparing and submitting responses on your behalf, ensuring compliance and minimizing disruptions.
Consequences of Ignoring GST Notices
Failure to respond to GST notices can lead to severe consequences, such as:
- Penalties and fines.
- Tax assessments based on incomplete data.
- Prosecution for non-compliance.
- Asset attachment and recovery actions.
Why Choose BeyondYourFinance?
BeyondYourFinance is your trusted partner in ensuring seamless GST compliance. From GST registration and filing to handling notices, our experts provide end-to-end support. If you’ve received a GST notice, our team will craft a comprehensive response, safeguarding your business from potential risks.
Get in touch today for professional assistance and proactive compliance solutions.