GST Notice Reply in India: ASMT-10, DRC-01A, DRC-01 and SCN Guide

Receiving a GST notice does not automatically mean that the tax demand raised by the department is correct. GST notices may arise from return mismatches, input tax credit differences, turnover reconciliation, reverse charge liability, refund verification, e-way bill data, tax-rate issues or other information available with the GST authorities.

Quick Answer: A GST notice should first be identified by its form, statutory section, financial year, allegations and response deadline. The taxpayer should then reconcile the notice with GST returns, books of account and supporting documents and submit a point-wise factual and legal reply. Scrutiny notices in FORM GST ASMT-10 are generally replied to through FORM GST ASMT-11, while a reply to a show cause notice whose summary is uploaded in FORM GST DRC-01 is generally furnished in FORM GST DRC-06.

The appropriate response depends upon whether the proceeding relates to scrutiny under Section 61, pre-show cause communication through DRC-01A, demand proceedings under Sections 73 or 74 for periods up to FY 2023-24, or proceedings under Section 74A for FY 2024-25 onward.

Businesses facing GST scrutiny, assessment, show cause notices or demand proceedings may also refer to our GST Assessment and Litigation Services in India.

What Is a GST Notice?

What does a GST notice mean?

A GST notice is a formal communication issued by a GST authority seeking information, clarification, reconciliation, payment of tax or an explanation regarding a possible non-compliance under GST law.

The nature of the communication is important. A notice may merely seek an explanation regarding a discrepancy or it may initiate formal proceedings for determination of tax, interest and penalty.

GST notice, intimation and demand order are different

Taxpayers should not treat every communication from the GST Department as a final demand. An ASMT-10 scrutiny notice, DRC-01A pre-notice intimation, DRC-01 summary of show cause notice and DRC-07 summary of an adjudication order represent different stages of GST proceedings.

The response strategy, supporting documents, available payment options and appellate remedies can therefore differ substantially depending upon the form and statutory provision involved.

Why Do Businesses Receive GST Notices?

The GST system allows tax authorities to compare information reported by taxpayers with returns, statements, e-invoices, e-way bills, supplier data and other information available with the department. Differences identified through such comparisons may result in scrutiny or further proceedings.

Mismatch between GSTR-1 and GSTR-3B

A common issue arises where outward supplies reported in GSTR-1 do not reconcile with taxable turnover or tax liability discharged through GSTR-3B.

The difference may arise because of amendments, credit notes, timing differences, reporting errors, advances, incorrect tax periods or genuine short-payment of tax. A proper reconciliation should identify the reason instead of simply accepting the gross mismatch appearing in departmental data.

Input tax credit discrepancies

GST notices may also question input tax credit claimed in GSTR-3B when compared with GSTR-2B, purchase registers or supplier filings.

The reply should examine invoice eligibility, supplier reporting, receipt of goods or services, payment conditions, reversals, re-availment and the statutory provisions applicable to the relevant period.

Businesses should regularly perform such reconciliations as part of their GST return filing and compliance process.

Tax rate, classification and short-payment issues

A notice may allege that supplies were taxed at an incorrect GST rate, wrongly treated as exempt, classified under an incorrect HSN or SAC, or treated as intra-State instead of inter-State supplies.

Such matters require examination of the underlying transaction and applicable legal provisions instead of relying only on a portal-generated difference.

What Should You Do Immediately After Receiving a GST Notice?

Verify the notice and response deadline

Download the complete notice and all annexures from the official GST Portal. Verify the GSTIN, financial year, tax period, reference number, date of notice and due date for response.

The taxpayer should also preserve the original notice and electronic acknowledgement because the date of service may be important for determining statutory timelines.

Identify the form, section and financial year

Before drafting any response, identify whether the communication is an ASMT-10 scrutiny notice, DRC-01A intimation, show cause notice accompanied by DRC-01, audit communication, registration notice or another proceeding.

This has become particularly important because the demand provisions changed for later financial years. Sections 73 and 74 now apply to periods up to FY 2023-24, whereas Section 74A applies to FY 2024-25 onward.

Collect records before preparing the reply

The notice should be compared with the relevant GSTR-1, GSTR-3B, GSTR-2B, annual return, trial balance, sales register, purchase register, tax ledgers, invoices and other relevant records.

Where the issue has arisen from accounting or record discrepancies, businesses may also review their obligations relating to accounts and records under GST.

FORM GST ASMT-10: Scrutiny of Returns under Section 61

What is FORM GST ASMT-10?

FORM GST ASMT-10 is issued where a return is selected for scrutiny and the proper officer identifies discrepancies while examining the return and related information.

Section 61 of the CGST Act enables scrutiny of returns, while Rule 99 prescribes the ASMT-10, ASMT-11 and ASMT-12 mechanism.

The notice ordinarily identifies the discrepancy noticed and, where possible, quantifies the tax, interest or other amount considered payable.

What is the time limit for replying to ASMT-10?

Under Rule 99, the proper officer may seek an explanation within the period specified in the notice, which should not exceed thirty days from the date of service, subject to such further period as may be permitted.

Accordingly, taxpayers should follow the actual response date stated in the notice and should not wait until the end of the maximum period where an earlier date has been specified.

What discrepancies can be raised in ASMT-10?

ASMT-10 scrutiny may involve differences relating to turnover, output tax liability, input tax credit, reverse charge, exempt supplies, exports, credit notes, tax rates, e-way bills or other information reflected in GST returns and departmental data.

The Central Board of Indirect Taxes and Customs provides the statutory framework for assessment and audit on the CBIC GST website.

How to Reply to ASMT-10 through ASMT-11

Prepare an issue-wise GST reconciliation

The response should deal separately with every discrepancy mentioned in the ASMT-10 notice.

For example, where a turnover mismatch is alleged, the taxpayer should prepare a reconciliation between books, GSTR-1 and GSTR-3B rather than merely submitting copies of the returns without explaining the difference.

Accept or contest the discrepancy based on records

If the discrepancy is correct, the taxpayer may accept it and take the corrective action permitted under GST law, including payment of the applicable amount where required.

If the discrepancy is not correct, the reply should clearly explain why the departmental comparison does not represent an actual tax shortfall.

A taxpayer should not make payment merely because a difference appears in a system-generated comparison without first checking whether the liability is legally and factually payable.

Attach relevant supporting documents

The ASMT-11 response should be supported by relevant reconciliations and documents such as invoices, ledgers, credit notes, debit notes, e-way bills, shipping documents, payment evidence or other records depending upon the issue involved.

Documents should be indexed and cross-referenced to the relevant paragraph of the reply wherever practical.

What Happens After ASMT-11?

Closure through FORM GST ASMT-12

If the proper officer considers the explanation furnished by the registered person acceptable, the taxpayer may be informed accordingly in FORM GST ASMT-12.

This is an important reason for preparing the scrutiny response carefully at the ASMT-10 stage. A well-supported explanation may resolve a factual mismatch before it develops into a formal demand proceeding.

Escalation where the explanation is not accepted

If the explanation is not satisfactory or corrective action is not taken where the discrepancy has been accepted, further action may be initiated under applicable GST provisions, including audit, investigation or demand proceedings.

Businesses facing wider departmental review may also refer to our GST Audit Services in India and GST Audit Checklist.

FORM GST DRC-01A: Pre-Show Cause Communication

What is DRC-01A?

FORM GST DRC-01A is a pre-show cause communication through which the proper officer may communicate tax, interest and penalty ascertained by the officer before service of a formal show cause notice.

Rule 142 of the CGST Rules presently covers DRC-01A in relation to proceedings under Sections 73, 74 and 74A. The current Rule 142 can be referred to through the CBIC Tax Information Portal.

Is DRC-01A mandatory before every GST show cause notice?

No. The current wording of Rule 142(1A) states that the proper officer may communicate the ascertained liability through Part A of FORM GST DRC-01A before issuance of the notice.

Accordingly, absence of DRC-01A should not by itself be assumed to mean that a subsequent show cause notice is invalid. The validity of proceedings should be examined on the applicable statutory provisions and facts of the case.

How should a taxpayer reply to DRC-01A?

If the taxpayer disagrees with the proposed liability or has made only partial payment, submissions may be furnished in Part B of FORM GST DRC-01A.

The response should normally explain the facts, reconciliation, legal basis and supporting documents showing why the proposed liability should be reduced or dropped.

Where the issue can be resolved at this stage, a properly documented DRC-01A submission may help prevent avoidable adjudication.

FORM GST DRC-01: Summary of Show Cause Notice

What is FORM GST DRC-01?

FORM GST DRC-01 is the electronic summary of a show cause notice issued under specified provisions of the GST law.

Rule 142 requires a summary of notices under Sections 73, 74, 74A and various other specified provisions to be served electronically in FORM GST DRC-01.

How is a DRC-01 show cause notice replied to?

The representation or reply to a notice whose summary has been uploaded in DRC-01 is generally furnished electronically in FORM GST DRC-06 in accordance with Rule 142.

A detailed written submission may be attached to DRC-06 together with annexures, reconciliations and supporting documents.

Read the complete show cause notice, not only the DRC-01 summary

The taxpayer should analyse the complete show cause notice and its annexures rather than relying exclusively on the summary displayed in DRC-01.

The response should identify the allegation, factual basis, tax period, amount proposed, applicable statutory provision and evidence relied upon by the department.

Sections 73, 74 and 74A: Which Demand Provision Applies?

The statutory provision applicable to a GST demand now depends significantly on the financial year involved.

Provision	Relevant Period	Broad Nature
Section 73	Up to FY 2023-24	Tax not paid, short paid, erroneous refund or wrongful ITC for reasons other than fraud, wilful misstatement or suppression to evade tax
Section 74	Up to FY 2023-24	Cases involving fraud, wilful misstatement or suppression of facts to evade tax
Section 74A	FY 2024-25 onward	Common determination provision, with different penalty consequences depending upon whether fraud or suppression is involved

The current consolidated CGST Act may be referred to on the official India Code website.

Section 73 for periods up to FY 2023-24

Section 73 deals with tax not paid or short paid, erroneous refund or input tax credit wrongly availed or utilised for reasons other than fraud, wilful misstatement or suppression of facts to evade tax.

The section now expressly applies to determination relating to periods up to Financial Year 2023-24.

Section 74 for periods up to FY 2023-24

Section 74 applies where the alleged tax short-payment, erroneous refund or wrongful input tax credit relates to fraud, wilful misstatement or suppression of facts to evade tax.

The allegation of fraud or suppression is therefore material because it affects the statutory framework and penalty consequences.

Section 74A for FY 2024-25 onward

For Financial Year 2024-25 onward, Section 74A provides the principal framework for determination of tax not paid or short paid, erroneous refund or input tax credit wrongly availed or utilised.

Section 74A contains separate penalty consequences depending upon whether the matter involves fraud, wilful misstatement or suppression of facts to evade tax.

It therefore remains important to contest an unsupported allegation of fraud or suppression even though both categories now fall within Section 74A for these later financial years.

Important Section 74A timelines and penalty framework

Section 74A provides, among other things, that the notice is to be issued within forty-two months from the relevant annual-return due date or, in an erroneous-refund case, from the date of erroneous refund. The order is generally required within twelve months from issuance of the notice, subject to the statutory power of extension for the prescribed additional period.

For non-fraud cases, the statutory penalty under Section 74A is generally ten per cent of tax due or ₹10,000, whichever is higher. Where fraud, wilful misstatement or suppression to evade tax is established, the penalty may be equivalent to the tax due.

Section 74A also provides specified concessional consequences where eligible payments are made before notice or within the stipulated period after the show cause notice or order. The exact liability should be calculated based on the particular facts and statutory provision applicable to the proceeding.

Common Issues Raised in GST Notices

GSTR-1 versus GSTR-3B differences

A mismatch between turnover or tax reported in GSTR-1 and GSTR-3B is one of the most common scrutiny issues.

The reconciliation should identify timing differences, amendments, credit notes, incorrect reporting, tax paid in another period and genuine short-payment separately.

GSTR-2B versus input tax credit claimed

Not every difference between purchase records and GSTR-2B has the same legal consequence. The taxpayer should identify the tax period involved, applicable ITC conditions, supplier reporting and any subsequent rectification or reversal.

A month-wise and vendor-wise reconciliation is normally more useful than a single consolidated difference.

Reverse charge mechanism differences

Notices may identify possible short-payment of tax under reverse charge where departmental information does not match the RCM liability reported by the taxpayer.

The business should verify the nature of expenditure, supplier status, applicable notification, tax period, place of supply, payment of RCM tax and corresponding eligibility of input tax credit.

E-way bills, turnover and tax-rate discrepancies

E-way bill data may be compared with GSTR-1, GSTR-3B and books to identify potential unreported supplies. However, differences can arise because of cancelled e-way bills, bill-to ship-to transactions, job work, stock transfers, delivery challans or other non-revenue movements.

Where e-way bill issues are involved, refer to our detailed guide on E-Way Bill under GST.

Documents Required for GST Notice Reply

Basic GST and accounting records

Depending upon the issue, the taxpayer may require:

• GSTR-1 returns;
• GSTR-3B returns;
• GSTR-2B statements;
• annual GST returns, where applicable;
• trial balance and financial statements;
• sales register;
• purchase register;
• general ledger extracts; and
• electronic liability, credit and cash ledger details.

Issue-specific supporting documents

Depending on the allegation, supporting documents may include tax invoices, debit notes, credit notes, contracts, e-way bills, shipping bills, bills of entry, LUT documents, bank realisation evidence, payment records and correspondence with suppliers or customers.

Refund-related notices may require additional documentation connected with the underlying claim. Businesses handling such matters may refer to our GST Refund Services.

Reconciliation working papers

A strong GST notice response frequently depends more on the quality of reconciliation than the volume of documents attached.

Prepare clear workings showing the figures as per books, GST returns and departmental notice, followed by the reason for each difference and the supporting evidence.

How to Draft a Strong GST Notice Reply

Start with preliminary facts and notice particulars

The reply should identify the taxpayer, GSTIN, financial year, notice reference number and relevant statutory provision.

Where appropriate, record preliminary issues relating to jurisdiction, limitation, duplication of proceedings, incorrect period or other threshold matters before addressing the merits.

Give a para-wise response to every allegation

A GST reply should ordinarily follow the sequence of allegations raised in the notice.

Each allegation can be answered under a separate heading stating whether it is accepted, partly accepted or disputed and explaining the factual and legal reason.

Avoid leaving any material allegation unanswered merely because it appears incorrect.

Support legal submissions with documentary evidence

Legal arguments are considerably stronger when supported by the underlying transaction documents and reconciliation.

For example, a place-of-supply argument should be supported by invoices and contracts, while an ITC dispute should be supported by invoice records, receipt evidence and relevant return data.

Conclude with a clear prayer and indexed annexures

The final section should state clearly what relief is requested, such as acceptance of the explanation, dropping of the proposed demand or restriction of liability to the amount actually payable.

Attachments should preferably be numbered and indexed. After electronic filing, preserve the acknowledgement and exact final set of documents submitted.

Personal Hearing and Principles of Natural Justice

When should a personal hearing be requested?

Section 75 contains general provisions governing determination of tax and provides for an opportunity of hearing where a request is received in writing from the person chargeable with tax or penalty, or where an adverse decision is contemplated.

Where material factual or legal disputes are involved, the taxpayer should consider specifically requesting a personal hearing in the written response.

Prepare a short hearing note

For significant GST disputes, it is useful to prepare a brief hearing note summarising the disputed issues, reconciliation, statutory provisions and principal supporting documents.

Any important additional document or clarification submitted during the hearing should be properly placed on record in accordance with the applicable procedure.

Payment Through DRC-03 and Settlement of Proceedings

When is FORM GST DRC-03 used?

FORM GST DRC-03 is used for intimating specified voluntary payments or payments made in connection with proceedings under the GST law.

Rule 142 contains the mechanism for reporting such payment and the related acknowledgement or conclusion of proceedings where the statutory conditions are satisfied.

The available benefit and payment timeline depend upon whether the case falls under Section 73, Section 74 or Section 74A and whether fraud or suppression is alleged.

Payment should follow proper verification

A taxpayer should distinguish between a genuine admitted liability and an amount merely proposed by the department.

Before making a significant payment, the taxpayer should verify the underlying computation, interest calculation, available statutory concession and effect of payment on the pending proceeding.

What Happens After a GST Demand Order?

Review the adjudication order and DRC-07 immediately

After adjudication, the summary of the order may be uploaded in FORM GST DRC-07. The taxpayer should obtain and review the complete speaking order rather than looking only at the demand appearing in the electronic liability register.

Compare the final order with the show cause notice, reply, documents submitted and submissions made during personal hearing.

Consider appeal under Section 107

A person aggrieved by an appealable decision or order may consider filing an appeal under Section 107 of the CGST Act within the applicable limitation period.

An appeal by the taxpayer is generally required within three months from communication of the decision or order, with limited statutory power for condonation of further delay. The prescribed payment of admitted dues and applicable pre-deposit must also be considered before filing.

Because limitation begins from communication of the order, the appellate strategy should be reviewed promptly instead of waiting until recovery action begins.

How EzyBiz India Assists with GST Notice Replies

Scope of our GST notice and litigation support

EzyBiz India Consulting LLP assists businesses with GST scrutiny, assessments, show cause notices and related litigation matters.

Our support may include:

• review of GST notice and annexures;
• identification of applicable statutory provisions;
• GSTR-1, GSTR-3B and GSTR-2B reconciliation;
• books-to-GST turnover reconciliation;
• input tax credit review;
• reverse charge reconciliation;
• preparation of ASMT-11 replies;
• reply to DRC-01A;
• preparation and filing support for DRC-06;
• drafting of factual and legal submissions;
• compilation of supporting documents;
• personal hearing assistance;
• review of GST demand orders; and
• GST appeal and litigation support.

For broader assistance, visit our GST Assessment and Litigation Services page or our GST and Indirect Tax Services section.

Why early review of a GST notice is important

The earlier a notice is reviewed, the greater the opportunity to identify reconciliation errors, collect supporting records and place the taxpayer’s explanation properly on record.

A notice response prepared only shortly before the deadline may result in incomplete reconciliations, missing evidence or avoidable admissions which may later affect adjudication or appeal.

Frequently Asked Questions

How much time is available to reply to an ASMT-10 notice?

Rule 99 provides for the proper officer to specify the response time in the ASMT-10 notice, not exceeding thirty days from service, subject to such further period as may be permitted. The taxpayer should follow the actual deadline stated in the notice.

Is DRC-01A compulsory before issuing DRC-01?

The present wording of Rule 142(1A) states that the proper officer may communicate the proposed liability in Part A of DRC-01A before issuing the formal notice. Accordingly, DRC-01A is not expressed as a mandatory step in every case under the current rule.

What happens if a GST notice is ignored?

If a taxpayer does not respond within the permitted time, the officer may proceed based on the information available and applicable provisions of law. This can increase the risk of an adverse demand, interest, penalty and subsequent recovery proceedings.

Even where additional time is required to collect documents, the notice should not simply be ignored.

Can a Chartered Accountant assist with a GST notice reply?

Yes. A Chartered Accountant or other eligible professional may assist the taxpayer with reconciliation, preparation of submissions, documentation and representation subject to the applicable statutory and procedural requirements.

For complex disputes involving interpretation, substantial demands or litigation strategy, the taxpayer may also require legal counsel depending upon the nature of the proceeding.

Can a GST demand order be appealed?

Yes. An appealable GST adjudication order may generally be challenged before the appropriate Appellate Authority under Section 107, subject to the prescribed limitation period, payment of admitted liability, pre-deposit and other procedural requirements.

The order should be reviewed immediately on receipt so that the grounds of appeal, supporting documents and limitation period can be properly evaluated.

Related Services

• GST Assessment and Litigation Services
• GST Audit Services
• GST Return Filing Services
• GST Refund Services
• GST Registration Services
• GST and Indirect Tax Services

Official Resources

• GST Common Portal
• Central Board of Indirect Taxes and Customs – GST
• CBIC Tax Information Portal – Rule 142
• Central Goods and Services Tax Act, 2017 – India Code

Prepared By:
EzyBiz India Consulting LLP

Reviewed By:
Anil Agrawal, Chartered Accountant
Founder, EzyBiz India Consulting LLP
20+ Years of Experience in Tax, GST, Regulatory Compliance and Business Advisory

Last Updated: 20 September 2026

Disclaimer:
This article is intended for general informational purposes only and does not constitute legal, tax or professional advice. GST notices, scrutiny proceedings, demand provisions, response timelines, penalty consequences and appellate remedies depend upon the relevant financial year, statutory provision, nature of allegation and facts of the particular case. Sections 73 and 74 apply to specified determination proceedings pertaining to periods up to FY 2023-24, while Section 74A applies to relevant proceedings for FY 2024-25 onward. GST law, rules, notifications, circulars and judicial interpretations may change from time to time. Taxpayers should review the actual notice and obtain professional advice before filing a response, making payment or taking any litigation decision.