Tax Litigation
Notices under GST- Why, What and When
by in Tax Litigation
Publish on September 9th, 2023
Notices under GST

Notices under the Goods and Services Tax (GST) regime are issued by the tax authorities to individuals or companies when there is a perceived violation of the GST law or a discrepancy in the returns filed. The purpose of these notices is to bring the matter to the attention of the individual or company and to give them an opportunity to respond and rectify the situation.

Reasons for issuance of Notices under GST

The government or GST officials often send notices to registered taxpayers pertaining to any non-compliance or oversight in their GST returns. Some of the most common reasons for such notices include,

  • Mismatching details in inward ( as per GSTR 2A)and outward (as declared in GSTR 1) summary i.e., ITC and Tax liabilities details respectively
  • Delayed Return filing
  • The mismatch between E- Way Bill portal and GSTR 1
  • Profiteering
  • A faulty claim of ITC
  • Failure to obtain GST Registration
  • Inconsistency in return compliance
  • Non-Payment of tax liabilities.

Under such circumstances, the government/GST officials may send you a notice form as applicable.

Types of notices under GST

There are several types of notices that can be issued under GST, including:

  1. Show Cause Notice (SCN) – This notice is issued when the tax authorities believe that an individual or company has violated the GST law or has not paid the correct amount of tax. The notice requires the individual or company to explain their actions and to show cause as to why the violation should not be penalized.
  2. Demand Notice – This notice is issued when the tax authorities believe that an individual or company owes taxes under GST. The notice requires the individual or company to pay the outstanding tax within a specified period of time.
  3. Inspection Notice – This notice is issued when the tax authorities want to inspect the books of accounts or records of an individual or company to verify the accuracy of their GST returns.
  4. Adjudication Notice – This notice is issued when the tax authorities have made a decision on the matter and imposed a penalty on the individual or company. The notice requires the individual or company to pay the imposed penalty.
  5. Recovery Notice – This notice is issued when the tax authorities have not received payment of the imposed penalty from the individual or company. The notice requires the individual or company to pay the outstanding amount within a specified period of time.

GSTR-3A

What/Why
Default notice to non-filers of GST returns in GSTR-1 or GSTR-3B or GSTR-4 or GSTR-8

What to do:
File the particular GST Returns, that is yet to be filed along with late fees for the delay and interest on the GST liability, if any

When:
Within 15 days of receiving notice

CMP-05

What/Why
Show-cause notice to Question the eligibility of a taxpayer to be a composition dealer

What to do:
Justify along with reasons as to why the taxpayer should still be eligible for the composition scheme

When:
Within 15 days of receiving notice

REG-03

What/Why
At the time of verifying the application for GST registration, a notice can be sent requiring the clarification for the information provided in the application or documents needed for verification. Also, the same form for the notice is applicable for amendment of GST registration

What to do
Assesse needs to furnish a clarification to the notice in REG-04 with clarification or the information

When

Within 7 working days of receiving notice

REG-17

What/Why
Show cause notice why should the GST registration not be cancelled for the reasons laid down in the notice

What to do
Assesse needs to furnish a clarification to the notice in REG-18 with the reasons for non-cancellation of GST registration

When
Within 7 working days of receiving notice

REG-23

What/Why
Show cause notice why the cancellation of GST registration must be revoked, for the reasons laid down in the notice

What to do
Assesse needs to furnish a clarification to the notice in REG-24

When:
Within 7 working days of receiving notice

REG-27

What/Why
In case of migration into GST by taxpayers of the VAT regime, a notice can be issued in REG-26 within the time limit prescribed, for not making application after obtaining provisional registration or not giving correct or complete details therein

What to do
Reply by applying in REG-26 and appear before the tax authority giving reasonable opportunity to be heard

When
Not yet prescribed

PCT-03

What/Why
Show-cause notice for misconduct by the GST practitioner

What to do
Reply within the time prescribed in the show cause notice

When
As prescribed in the show-cause notice

RFD-08

What/Why
Show cause notice as to why the GST refund must not be made to the applicant (taxpayer)

What to do
Assesse needs to furnish a clarification to the notice in RFD-09

When
Within 15 days of receiving notice

ASMT-02

What/Why
Notice for Seeking Additional Information for provisional assessment under GST

What to do
Assesse needs to furnish a clarification to the notice in ASMT-03 along with documents

Read here to know more https://irisgst.com/9-answers-to-the-most-frequently-asked-questions-about-provisional-assessment-in-gst-1/

When
Within 15 days of receiving notice

ASMT-06 

Read here to know more: https://irisgst.com/9-answers-to-the-most-frequently-asked-questions-about-provisional-assessment-in-gst-1/

What/Why
Notice for seeking additional information for Final assessment under GST (for those who applied for provisional assessment)

What to do:
Reply in 15 days of receipt of the notice

When:
Within 15 days of receiving notice

ASMT-10

What/Why
Scrutiny notice for intimating discrepancies in the GST return after scrutiny along with tax, interest and any other amount payable in relation to such discrepancy, if any

What to do
Reply in ASMT-11 giving reasons for discrepancies in the GST returns

When
As prescribed in show-cause notice or within 30 days of receiving the notice.

ASMT-14

What/Why
Show Cause Notice for assessment under section 63- reasons for conducting the assessment on the best judgment basis

What to do
Reply in written form and appear before the GST authority issuing the notice

When
Within 15 days of receiving notice

ADT-01

What/Why
Notice for conducting audit by Tax authority under Section 65

What to do
Attend in person as directed in the notice or produce records

When
As prescribed in the show-cause notice

RVN-01

What/Why
Notice under section 108 issued to the taxpayer by the revisional authority before passing the revision order of appeals, giving the opportunity of being heard. Order of revision is usually passed to fix errors in order for appeals passed under section 108

What to do
Reply within the prescribed time and/or appear before the GST authority passing the order of revision on a given date and time

When
Within 7 working days of receiving notice

Notice of Enquiry by Directorate of Anti-profiteering   

What/Why
In cases where the supplier has not passed on the benefit of ITC/reduced GST rates to the recipient/consumer, proceedings may be initiated by the Directorate of anti-profiteering. All interested parties will get a notice asking for more details.

What to do
Cooperate in the proceedings and provide evidence, if any

When
As prescribed in the notice

DRC-01

What/Why
Show cause Notice for Demand of Tax is issued for demanding tax paid shortly or not paid with or without an intent to defraud. It is served along with a statement of details in DRC-02

What to do
Reply in DRC-03 for paying the amount of tax demanded in the notice along with Interest and penalty*, if any applicable. Use DRC-06 to reply to the show cause notice.

P.S: In case where no fraud is committed, the penalty is chargeable only if payment is made beyond the thirty days’ time limit

When
Within 30 days of receipt of the notice

DRC-10 and DRC-17

What/Why
Notice of Auction of Goods under section 79(1)(b) of the Act- Reference to the order of demand will be given, being the order for recovery through specified officer under section 79 OR through execution of decree

What to do
Must be able to pay the outstanding demand as per DRC-09

When
As prescribed in the notice

DRC-11

What/Why
Notice to the successful bidder

What to do
Pay the full bid amount

When
Within the 15 days from the date of the auction

DRC-13

What/Why
Notice of Recovery of outstanding tax from a third person

What to do
Deposit the amount specified in the notice and reply in DRC-14

When
NA

DRC-16

What/Why
Notice for attachment and sale of immovable/movable goods/shares under section 79

What to do
A taxpayer receiving  this notice is prohibited from transferring or creating a charge on the said goods in any way and any transfer or charge created by you shall be invalid

When
NA

Penal provisions for not replying to the official Notice

If a registered taxpayer does not take any action in the given time for the GST notice received, he can be subjected to penalties, confiscation and further proceedings as applicable under the GST law.

These penal provisions can be,

  • Cancellation of GST registration
  • Rejection of application
  • Monetary Penalty
  • Rejection of Refund application
  • Auction
  • Seizure of goods and property
  • Recovery of GST liabilities

Thus, we recommend you, if you have received a notice, kindly take appropriate action within the given time, while ensuring such negligence, misstep, or delayed filing of GST returns are not repeated.

****

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Anushree Joshi
Anushree Joshi

A Chartered Accountant with 12-year experience in XBRL domain serves as a Subject Matter Expert and Global head of Customer Success, with active participation in the XBRL working groups of Best Practices and ESG, her collaborative efforts extend to include Fortune 500 firms in the UK, European region, US and leading Indian XBRL reporters in India. She has represented IRIS at XBRL Europe Conference by presenting the digital perspective of ESG reporting and Peer to peer benchmarking.

There are 5 comments on this post
  1. Avatar
    Yash Jain
    November 29, 2019, 2:02 pm
    Leave reply

    What about RFD-03, the circular states 30 days from the date of communication of notice. So does that mean from the date of notice or from the date when the notice was received?

  2. Avatar
    Kitana Seher
    May 26, 2020, 7:43 pm
    Leave reply

    Honestly i’am not good at reading but your blog is really easy to understand, thanks for sharing…

  3. Avatar
    ATUL TALREJA
    June 22, 2020, 1:00 pm
    Leave reply

    HELLO
    IF DEALER NOT RESPOND GST DRC 01A WHAT IS CONSEQUENCES HAS TO FACE BY DEALER

  4. Avatar
    Shankar Jha
    September 22, 2020, 9:01 pm
    Leave reply

    Such a great blog about gst. Everyone should follow this blog.

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