GST notices serve as a communication tool between the department and the taxpayer. The department might issue a notice simply to request more information about a return filed by the taxpayer. In addition, the department may also issue notices to address discrepancies in returns. Furthermore, notices communicate issues like short payment of taxes, late return filings, ITC mismatches, and tax evasion. In fact, these notices allow taxpayers to correct discrepancies, clarify issues, justify their positions, and present supporting documents, ensuring they receive a fair decision from the department.
Reasons for GST notices
Understanding the purpose and the legal provisions for GST notices helps draft effective replies and reduce the stress on receiving GST notices.
Following table illustrates the various reasons why a taxpayer may receive GST notices and legal provisions governing issue of these notices.
| Reason for GST notice | Relevant Section of CGST Act, 2017 | Legal provisions |
| Information Regarding New Registration | Section 25 | To request for additional information or clarification when a person applies for new registration. |
| Cancellation or Revocation of Registration | Section 29 | · In the event, that the registered entity does not conduct business for a specified period, has contravened provisions of the Act, or obtained registration fraudulently. · Proper officer may proceed with the cancellation of registration by issuing a notice under section 29. |
| Non-payment, short payment, erroneous refund or wrongful availment of ITC | Section 73 | · Show-cause notice as to why taxpayer should not pay the tax amount with interest u/s 50 and penalty. · However, it is applicable only when the taxpayer’s intention is other than fraud, wilful-misstatement or suppression of facts to evade tax. |
| Non-payment, short payment, erroneous refund or wrongful availment of ITC | Section 74 | · The show-cause notice as to why the taxpayer should not pay the tax amount with interest u/s 50 and penalty. · However, this is applicable only when the taxpayer’s intention is fraud, wilful misstatement or suppression of facts to evade tax. |
| Tax Collected but Not Deposited | Section 76 | · If a person collects GST but does not deposit it with the government, as per this section, tax is payable even if the taxpayer does not make the supplies on which GST has been collected. · A show cause notice will be explained why tax amount and penalty should not be imposed. |
| Return Defaulters | Section 46 | · If a registered person does not submit a return under section 39, 44, or 45 by the due date, they will receive a notice which specifies a deadline of 15 days for the taxpayer to file the overdue returns. · Additionally, it advises the taxpayer to submit the overdue returns to prevent potential legal action and penalties. |
| Refund Claims | Section 54 | To request additional information or documents to process a refund claim. |
| Scrutiny of Returns | Section 61 | · The tax authorities review the returns for any discrepancies or errors. · The notice will specify the issues and request the taxpayer to provide explanations or rectify the discrepancies. |
| Notice to Unregistered Persons | Section 63 | · The proper officer will send a notice to individuals who were supposed to register for tax but failed to do so. · A notice will also be sent to individuals whose tax registration was canceled but who were still liable to pay tax. If the recipient does not provide a satisfactory response, the proper officer may proceed to determine the tax liability to the best of his judgment. |
Replying to GST Notices
It is the responsibility of the taxpayer to file an adequate reply to notices within the given timeframe. However, replying to a notice also depends on the type of notice that the department has issued. Hence, we must understand the various categories of notices.
| Notice Type | Demand Notice | Scrutiny Notice | Show Cause Notice |
| Meaning | When tax authorities believe a taxpayer has not deposited due taxes, they issue a demand notice. This notice specifies the tax due, the reason for the demand, and any applicable interest or penalties. Thus, this notice provides the taxpayer an opportunity to pay the pending taxes. | When the proper officer believes a taxpayer’s return needs detailed examination, they issue a scrutiny notice. This notice informs the taxpayer of any discrepancies or errors in the return. Thus, it provides the taxpayer an opportunity to make corrections. | A show cause notice questions the taxpayer on why a particular action should not be taken. It is issued in cases of discrepancies, suspected fraud, or similar reasons. |
| Examples | Notice issued under section 73,74 | Notice under Section 61 | Notice under section 76 |
How to reply to GST notices?
Receiving GST notices can cause taxpayers to panic. However, having the right awareness can reduce the stress. Therefore, follow the systematic steps outlined below to prepare effective replies to GST notices.
1. First, read the notice carefully to understand the issues raised. Ensure that the notice is technically correct according to GST provisions and within the time limit.
2. Next, understand the specific issue and identify the relevant GST provision it falls under.
3. Next, draft your reply addressing each query point by point.
4. Also, support your reply with necessary documents such as GST returns, invoices, books of accounts, challans, and reconciliation statements.
5. You can submit your reply to GST notices online on the GST portal. Log in to the GST portal, go to ‘Services,’ then ‘User Services,’ and select ‘My Applications.’
6. Choose the relevant notice, upload your reply, and attach the necessary documents.
7. If needed, seek the help of a GST expert to assist you in drafting and submitting your replies.
Acceptable Modes of Issuing Notices
Section 169 of CGST act, 2017 prescribes the acceptable modes of issuing GST notices. These are:
1. Delivering the notice to the taxable person, their representative, or legal professional via a messenger.
2. Sending the notice by registered post, speed post, or courier with acknowledgement due, to the taxable person, their authorized representative, or to their place of business or residence.
3. Sending the notice to the taxpayer’s registered email address.
4. Making the notice available on the common portal.
5. Publishing the notice in a newspaper of the locality where the taxable person resides or has a place of business.
6. Affixing the notice at the taxable person’s last known place of business or residence.
7. Affixing the notice on the notice board of the office of the concerned officer or authority.
Filing Appeals for GST Notices
Issuing GST notice in itself means that the adjudicating authority is giving the chance to taxpayer to present their case. It means that the taxpayer gets due opportunity to furnish documents, evidences or clarifications to support their claim. Thereafter, the adjudicating officer issues the final order.
However, if the taxpayer is not satisfied with the decision of the adjudicating authority he can contest the order by way of appeal
Generally, the appeal goes to the higher authority than the officer who issues the order
Following are the various forms applicable for filing appeal
| GST appeal forms | Purpose |
| Form GST APL-01 | Appeal before the First Appellate Authority. |
| Form GST APL-05 | Appeals to the Appellate Tribunal. |
| Form GST APL-08 | For filing a memorandum of cross-objections |
Steps for filing appeal
1. First, log in to the GST Portal.
2. Go to the ‘Services’ menu, then ‘User Services,’ and select ‘My Applications.’
3. Next, choose the appropriate form for filing the appeal.
4. Next, provide the necessary details such as order number, date, and grounds of appeal.
5. Also, attach copies of the order, any supporting documents, and a signed verification form.
6. Pay the prescribed fees for filing the appeal.
7. Finally, submit the appeal form electronically through the GST portal.
Format of GST notices
This brief guide covers different types of notices taxpayers may receive, the actions they should take, the time limits for responding, and the penalties and actions officers may impose if GST notices are not complied with:
| Form Number | Purpose | Action by taxpayer | Response time limit | Action and penalty by department in case of non-compliance |
| GSTR-3A | Issued for not filing GST returns by the due date. | File GST Returns along with late fees and interest, if any | 15 days | Best judgement assessment with penalty u/s 122 |
| Form GST ASMT-10 | Issued in case of when discrepancies in the returns filed. | Give reasons for discrepancncies in form ASMT-11 | Within the time prescribed in the Show cause notice | Ex-parte assessment |
| Form GST ASMT-14 | For best judgement assessment under section 63 | Appear before concerned authority | 15 days | Assessment order in form ASMT-15 |
| Form GST CMP-05 | When eligibility to be a composition dealer is in question | File justifications for your eligibility | 15 days | Penalty u/s 122 and order (in form CMP-07) denying the benefit of the composition scheme |
| Form GST REG-03 | For additional information or clarification in a GST registration application. | Reply in form REG 04 with the information asked for | 7 days | Rejection of application. The department sends the decision in form REG 05 |
| Form GST REG-17 | Show cause notice for cancellation of GST registration | Justify non-cancellation in reply. Send reply in form no. REG-24 | 7 days | Cancellation of GST registration |
| Form GST PCT-03 | Issued in case of misconduct or non-compliance by a GST practitioner. | Send justifications or appropriate reply to the questions raised | Within prescribed time limit | Cancellation of license |
| Form GST DRC-01 | For tax not paid, short paid, or incorrect refunds where there is no fraud or willful misstatement. (served along with DRC-02) | File reply along with tax, interest & penalty in form DRC 03. File reply to show-cause notice in form DRC 06 | 30 days | Order passed with available details |
| Form GST DRC 10 | Notice for Auction of Goods u/s 79(1)(b) | Pay outstanding demand as per form DRC-09 | As per notice | Proceed with auction and sale |
| Form GST DRC-11 | Order to the successful bidder to pay the bid amount | Pay the bid amount | 15 days | Re-auction of property |
| Form GST DRC-13 | Notice to a third person u/s 79(1)(c) | Deposit the amount specified and file reply in form DRC-14 | Not Applicable | Deemed to be a defaulter |
| Form GST DRC-16 | Notice for attachment and sale of properties | Refrain from transferring/ creating charge on the asset | Not Applicable | Prosecution and penalties |
Conclusion: Effective Management of GST Notices
With awareness about GST notices, proper management is also essential. Handling GST notices presents challenges like difficulty in interpreting complex laws and lack of resources and time.
Using GST software can significantly help in managing these notices effectively. Such software ensures accurate GST filings and ITC claims. Also, it can auto-fetch notices from the GST portal and create alerts, so you never miss a notice. Furthermore, features like due date reminders are invaluable. Additionally, these tools can generate reports, summaries, and reconciliations, making it easier to draft and send replies without consuming too much time or resources.
Thus, by implementing carefully planned strategies and employing robust software, one can efficiently manage GST notices.
