Reply to GST department notices

Category: Summons & Notices. From ₹3,999. Typical timeline: 7–14 days.

Overview

GST notices — scrutiny notices, show cause notices, ASMT-10 for return discrepancies, or demand notices under Sections 73/74 — require a timely, well-drafted reply supported by reconciliations and documentary evidence, since an inadequate or missed response can turn a routine query into a confirmed tax demand with interest and penalty. Kanoons reviews the notice, reconciles the underlying GST returns and books, and drafts a reply addressing each point raised by the department within the stipulated timeline.

Who needs it

• A business that has received an automated ASMT-10 notice for return mismatches
• A taxpayer served a show cause notice under Section 73 (non-fraud) or Section 74 (fraud/suppression) demanding tax with interest and penalty
• A business facing an input tax credit mismatch notice due to supplier non-compliance
• A company that received a notice but is unsure how to reconcile and respond within the given timeline

Eligibility

• Any GST-registered taxpayer who has received a notice from the GST department
• Businesses with mismatches between GSTR-1, GSTR-3B and GSTR-2B/2A needing a reconciliation-backed response
• Taxpayers facing a scrutiny notice, ASMT-10, DRC-01 or similar communication

Documents required

• Copy of the notice received
• GST returns filed for the relevant period (GSTR-1, GSTR-3B, GSTR-2A/2B)
• Books of accounts, sales/purchase registers for the period in question
• Supporting documents for the specific issue raised (invoices, e-way bills, contracts)

Process

1. Notice analysis — The notice is analysed to identify the exact issue raised, the section invoked and the response deadline.
2. Reconciliation — Returns and books are reconciled to establish facts — whether the discrepancy is genuine, a reporting error, or a department data mismatch.
3. Reply drafting — A point-wise reply is drafted addressing each issue with supporting reconciliation and documentary evidence.
4. Filing — The reply is filed online on the GST portal (or physically, if directed) within the prescribed timeline.
5. Follow-up — Any further queries or personal hearing requirement from the department is tracked and responded to.

Government fees

• Government fees: Nil — filing a reply to a notice has no government fee; any tax/interest/penalty found genuinely payable is separate from professional charges

Professional fee

Starts at ₹3,999 per notice depending on the complexity of reconciliation required and number of issues raised; covers notice analysis, reconciliation and reply drafting/filing.

Timeline

Most GST notices allow 15–30 days for a reply; Kanoons typically completes analysis and drafting within 7–14 working days to allow adequate time for client review before the deadline.

Deliverables

• Point-wise reply to the notice with reconciliation statements
• Filed acknowledgment from the GST portal
• Summary of the issue and recommended next steps

Frequently asked questions

What happens if I don't reply to a GST notice?

Non-response typically results in the department passing an ex-parte order confirming the proposed demand, which then becomes payable along with interest and penalty and can only be challenged through appeal.

What is the difference between Section 73 and Section 74 notices?

Section 73 applies to cases without fraud or wilful misstatement and carries lower penalty exposure, while Section 74 applies where fraud, suppression or wilful misstatement is alleged and carries significantly higher penalty, up to 100% of the tax involved.

Can a GST notice be resolved without paying any additional tax?

Yes, if the reconciliation shows the discrepancy was a reporting or data-matching error rather than an actual short payment, a well-substantiated reply can result in the notice being dropped without any additional tax liability.

Common mistakes

• Ignoring an automated notice like ASMT-10 assuming it will resolve itself
• Replying without a proper reconciliation, leading to a generic response that does not address the department's actual query
• Missing the reply deadline, resulting in an ex-parte demand order
• Not maintaining supporting documents (e-way bills, delivery challans) needed to substantiate genuine transactions

Penalties for non-compliance

• Non-response can lead to a confirmed demand under Section 73 or 74 along with interest at 18% per annum and penalty ranging from 10% of tax (Section 73) up to 100% of tax (Section 74)
• Delayed response can foreclose the opportunity to pay tax with interest at the reduced/nil penalty stage available to early compliance under the Act
• A confirmed demand not paid can lead to recovery proceedings including attachment of bank accounts

Legal references

• Central Goods and Services Tax Act, 2017 (Sections 61, 73, 74) — govern scrutiny of returns and demand proceedings
• CGST Rules, 2017 (Rule 99, Form ASMT-10, DRC-01) — prescribe notice and reply formats
• State GST Acts — mirror the CGST provisions for state-level proceedings