What is a GST Notice?

A GST Notice is a formal intimation sent by the Goods and Services Tax (GST) authorities to a registered taxpayer regarding non-compliance, incorrect tax filings, or other tax-related issues. These notices may require businesses to provide additional information, rectify errors, or explain discrepancies in their GST returns.

Failure to respond within the specified timeline may result in penalties, interest, or legal action. Therefore, taxpayers must carefully review and address the notice to stay compliant with GST laws.

Common Reasons for Receiving a GST Notice

1. Non-Filing or Late Filing of GST Returns – If a taxpayer fails to file GSTR-1, GSTR-3B, or GSTR-9, the GST department may issue a notice.
2. Mismatch in Tax Liabilities – Discrepancies between GSTR-1 (sales) and GSTR-3B (tax paid) can trigger a notice.
3. Excess Input Tax Credit (ITC) Claims – Claiming ineligible or excessive ITC beyond the permissible limit.
4. E-Way Bill Violations – Issues related to incorrect or missing E-Way Bills during transportation.
5. Tax Evasion or Fraudulent Transactions – Engaging in fake invoicing or undisclosed transactions.
6. GST Refund Verification – Additional scrutiny of GST refund claims due to suspicious activities.

Types of GST Notices and How to Respond

1. Notice for Non-Filing of Returns (GSTR-3A)
   • Issued when a taxpayer fails to file GST returns on time.
   • Response: File the pending return along with interest and penalties.
2. Show Cause Notice (SCN) – GST REG-17, GST CMP-05
   • Sent when GST authorities find irregularities in tax payments, refunds, or registration details.
   • Response: Provide a detailed reply with supporting documents before the due date.
3. Demand Notice (GST DRC-01, DRC-07, DRC-13)
   • Issued for tax shortfall, interest, or penalties.
   • Response: Pay the dues or contest the demand by filing an appeal.
4. GST Audit/Investigation Notice (GST ADT-01, ADT-02)
   • Issued when the GST department selects a business for audit or investigation.
   • Response: Submit records such as invoices, ITC claims, and financial statements.
5. Notice for Cancellation of GST Registration (GST REG-23)
   • Sent when the department finds discrepancies in compliance.
   • Response: Justify why the GST registration should not be canceled.

How to Respond to a GST Notice?

1. Read the Notice Carefully – Understand the issue, section of the GST Act invoked, and response deadline.
2. Gather Supporting Documents – Collect GST returns, invoices, ITC records, and other proofs to support your case.
3. Reply Through the GST Portal – Login to the GST portal (www.gst.gov.in), navigate to the notice section, and submit your response.
4. Consult a Tax Expert (If Needed) – If the notice involves complex issues, seek professional guidance.
5. Track and Follow Up – Keep track of the response status and comply with further instructions from the GST department.