GST notice received, which form and what to do.

ASMT-10 (Notice of Discrepancy): issued by proper officer under Section 61 if return filed differs from information available. Response window: typically 30 days. Response via ASMT-11. Non-response: officer proceeds with audit under Section 65 or scrutiny.

DRC-01A (Pre-SCN Intimation): issued under Section 73(5) or 74(5) before formal SCN. Specifies proposed demand + reasons. Response window: typically 15 days. Response via DRC-03 (paying tax + interest voluntarily to close) or DRC-06 (contesting). Advantage of DRC-03: reduced penalty if voluntarily paid before SCN.

DRC-01 (Show Cause Notice under Section 73/74): formal SCN proposing tax demand. Section 73 (bona fide errors): penalty 10% or INR 10,000 whichever higher; 3-year time limit. Section 74 (fraud / wilful misstatement): penalty 100%; 5-year time limit. Response window: typically 30 days. Response via DRC-06.

GSTR-3A (Notice for Non-filing of Return): issued to taxpayer who has not filed GSTR-3B / GSTR-1 for one or more months. Response: file pending returns within 15 days or face Section 62 best-judgment assessment.

GSTR-2A / 2B vs GSTR-3B mismatch alerts: auto-generated by portal when ITC claimed in 3B exceeds reconciled 2B figures. Response: reconcile vendor-wise, chase vendors for missing invoices, reverse ineligible ITC.

Audit notice under Section 65 (ADT-01): formal audit of records. Response: provide records; audit completed within 3 months (extendable to 6).

Mechanism: ITC can be claimed in GSTR-3B only if the vendor has filed GSTR-1 showing the supply to you. GSTR-2A (dynamic) and GSTR-2B (static month-close snapshot) reflect what vendors have reported.

Mismatch types:

• Vendor has not filed GSTR-1 — invoice does not appear in your 2B. Your 3B ITC is excess vs 2B. Portal flags mismatch.
• Vendor filed GSTR-1 but with wrong GSTIN — invoice shows against someone else.
• Vendor filed GSTR-1 but delayed — invoice appears in a later month's 2B than when you claimed ITC.
• You claimed ITC on exempt / blocked supplies — e.g., personal use, Section 17(5) blocks (motor vehicles, construction materials for own buildings).

Response path:

1. Download GSTR-2B for the mismatch period. Match line-by-line with your purchase register.
2. Identify vendors who have not reported. Chase for GSTR-1 filing.
3. If vendor is unresponsive, reverse the ITC in next GSTR-3B (reversal with interest under Section 50).
4. If ITC was wrongly claimed on blocked / exempt supplies, reverse via GSTR-3B Table 4(B).
5. If mismatch is timing (vendor filed in later month), no action needed — ITC will match in the later period.
6. Document the reconciliation in GSTR-9 annual return.

Section 73: applies to bona fide errors, oversight, interpretation differences. No fraud alleged.

• Time limit: SCN within 3 years of due date of annual return (so for FY 2024-25, within 31 December 2028).
• Penalty: 10% of tax or INR 10,000, whichever higher.
• Voluntary payment via DRC-03 before SCN: nil penalty.
• Payment within 30 days of SCN: no penalty (interest only).

Section 74: applies to fraud, wilful misstatement, suppression of facts.

• Time limit: SCN within 5 years of due date of annual return.
• Penalty: 100% of tax.
• Voluntary payment via DRC-03 before SCN: 15% penalty.
• Payment within 30 days of SCN: 25% penalty.
• Beyond 30 days: full 100% penalty.

Section 73 vs 74 classification is often the key battle. Convert a 74 to 73 and penalty drops from 100% to 10%. Response strategy focuses on establishing bona fide error (interpretation, no suppression) and challenging the fraud allegation.

1. Read the notice carefully: identify form (ASMT, DRC-01A, DRC-01), the specific issue, response window, proposed demand amount, Section 73 or 74.
2. Pull GST records: GSTR-1 filed, GSTR-3B filed, GSTR-2A / 2B for the period, purchase register, sales register, GSTR-9 annual return.
3. Analyze the discrepancy: identify where the Department's view differs from yours.
4. Decide response strategy: pay-and-close (via DRC-03) if demand is correct, or contest (via DRC-06) with documents.
5. Draft response addressing each issue in the notice with supporting evidence.
6. File response via GST portal within the deadline.
7. Attend personal hearing if called (physical or virtual depending on jurisdiction).
8. Appeal to CGST Appellate Authority within 3 months if adjudication order is adverse.

Last updated: 2026-10-10.