My Business Got a GST Notice: What Should I Do? A Step-by-Step Guide

You log in to the GST portal one morning, say to check the status of your returns or download a certificate, and there it is. A notice. Your stomach drops. What did I do wrong? What is this issue’s impact? Am I going to get penalised?

Every month, thousands of businesses all over India, including many for minor mismatches in returns, are notified about the GST returns. Many of the businesses receive the GST notice for small discrepancies in the returns, for which a simple reply is sufficient, every day in the month. 

When a notice is sent when one is not sure of the nature of the notice or how serious it really is, it is then that Legal Rasta’s GST services can help. We assist you in the right responses to the GST notice India businesses should submit before the last date.

What Type of GST Notice Did You Actually Get?

Identify the notice type before you take any action. Let me tell you that each one has a different reason behind it, a different set of urgency, and a different strategy to reply.

Having said that, you must have a glance at the following table for your reference to the most common types: 

Once you know which notice you’re dealing with, the path forward becomes much clearer. An ASMT-10 scrutiny notice is very different from a DRC-01 fraud-related SCN — and your response strategy needs to match.

Common Reasons for Getting a GST Notice in 2025

These are the most common triggers for why you get a GST notice for your business: 

GSTR-1 vs GSTR-3B mismatch – Any mismatch in the value/tax for the supplies declared in GSTR-1 during the return of the supplies outward with GSTR-3B, the turnover declared in your monthly return.

ITC mismatch with the GSTR 2B – Input Tax Credit shown in GSTR 2B but not claimed by you

Failure to file returns — After two months from the deadline, the GSTR-3A notice is generated automatically.

Failure to make timely payment of GST — if less than what you sent in based on filed information —

Incorrect ITC availment: claiming ITC on ineligible expenses such as personal use and blocked ITC (under Section 17(5))

How to Respond to a GST Notice the Right Way?

Follow the guidelines and learn how to reply to a GST notice without any mistakes or worsening issues.

Step 1: Log in to the GST portal and locate the notice. To view the Notices and Orders, go to Services > User Services > View Notices and Orders.

Print and save the notice as a PDF. If you wish to download the GST notice, you should have your GSTIN and login information.

Step 2: Fully read the notice – every line. Keep note of the following:

• Number of notices,
• section of the CGST Act under which it is issued,
• name of issuing authority & its designation,
• nature of the allegations/discrepancies, and
• The deadline for the reply. 

Step 3: Guess what the appropriate answer structure is. A Response Form must be used for each of the notices.

• For ASMT-10 scrutiny notices, use ASMT-1.
• for REG-17 cancellation notices,
• use REG-18 and 06 for DRC-01 notices.

Step 4: Collect your supporting papers. You will require: GST returns (GSTR-1, GSTR-3,  B, and GSTR-2B), invoices for the disputed period, ITC working sheets, bank statements, purchase registers, and any previous communication with the department, depending on the type of notice.

Step 5: Write a factual response. Make sure you respond to any of the allegations in the notice. Ensure that there is no ambiguity; for GST procedures, be it an enquiry or claim, silence is interpreted as acceptance.

Step 6: Submit your online reply before the deadline. Please submit your response via the GST portal. In complicated cases or when a large amount of tax is being demanded, ask for a private hearing, just as the law provides that you have the right to a hearing before issuance of any adverse order.

Step 7: Monitor the results. Once you have replied, the officer must take into account your reply and pass a speaking order. Follow the portal on notices and orders regularly.

Don’t even try to draft a self-answer for Section 74 SCNs where there is a charge of fraud or wilful misstatement. Get a CA/GST practitioner straight away, as this is a very serious matter.

Deadlines You Cannot Miss — GST Notice Reply Time Limits

Missing a reply deadline doesn’t just hurt your case — it can trigger a chain of consequences that’s expensive and time-consuming to undo. Here’s what you need to know:

If you miss a deadline and an ex parte order gets passed, recovery proceedings under Section 79 of the CGST Act can kick in — including bank account attachment, salary attachment, and asset seizure. That’s a situation you want to stay well clear of.

What Happens If You Ignore a GST Notice?

The most costly error is to ignore a GST notice. So what happens if you don’t do anything:

Adjudication Ex Parte – the officer makes an order without the parties’ involvement, other than their right to present the department’s version. Your explanation is never even thought of.

Interest on the unpaid/late taxes collected under CGST — 18% payable on late payment/ unpaid from the due date to the actual date of payment.

Penalties for offences under Section 122 (relating to 21 different offences). The penalty in severe cases can be up to the amount of the tax.

GST suspension or cancellation of the GST registration — If you do not file, a non-filing notice will result in the cancellation of your registration, and you cannot issue valid tax invoices.

The CGST Act provides imprisonment up to 5 years for prosecution under Section 132 for wilful evasion of tax exceeding ₹2 crore.

These are not scare tactics; they are common escalation procedures that have been incorporated into the law! It is easy to avoid them all: just respond on time.

Section 73 vs Section 74 — Which Notice Is More Serious?

If your notice is a DRC-01, you need to know which section it’s issued under. This one detail changes everything about your penalty exposure and the urgency of getting help.

Here’s the key distinction:

One important pathway to know: DRC-01A is the pre-SCN intimation the officer sends before issuing a formal DRC-01.

If you receive a DRC-01A under Section 73 and pay the tax dues at that stage, you pay zero penalty — only tax and interest under Section 50. That’s a significant saving compared to waiting for the formal show cause notice.

For anything that looks like a Section 74 CGST Act fraud notice, get a GST practitioner involved before you respond. The DRC-01 reply format for Section 74 cases requires careful legal positioning — a wrong admission in your reply can be used against you.

Mistakes to Avoid When Replying to a GST Notice

Despite their sincere efforts, businesses often make inexcusable mistakes. These are the most expensive:

Responding to a notice, but not to each specific item of the notice. If you do not reply to anything, how can you prove its occurrence? 

Not writing a narrative to go with attachments — sending statements and invoices without a written explanation does not help. The officer must get the context, and doesn’t need only papers.

Failure to turn it in on time, even one day late. A late submission will not be accepted on the portal, and the department is not obliged to wait.

Not following the notice, thinking that it will find a way by itself — it will not. If you have not responded to an automated notice, it is automatically escalated.

Asserting a disagreement without supporting a response with any kind of legal support (i.e., without references to any CGST provisions, CBIC circulars, or Tribunal orders from previous cases) doesn’t weigh much.

Final Thoughts

A GST notice provider need not be a demand notice. If you respond promptly with proper supporting documents, then most notices (particularly ASMT-10 scrutiny notices and GSTR-3Anon-filing alerts) can be addressed without penalties. Those that cost you money are the ones that you ignore or mishandle.

GST notices have a tendency to multiply themselves like watercress when left unchecked. Do not face an ex parte order or a registered holding. LegalRaasta’s GST Advisors can remove the notice right off your plate – from composing the reply to attending a personal hearing if required to do so.

FAQs

How much time do I have to respond to a GST notice?

REG-03/REG-17 = 7 working days, GSTR-3A = 15 days, DRC-01/ASMT-10 = 30 days. It’s best to always verify the deadline mentioned in your notice.

Should I get a CA to assist me, or is it okay if I respond on my own?

Minor scrutiny or mismatch notices can be managed by yourself if you have the right set of documents. For fraud, suppression, or Section 74 show-cause notices, you should get a qualified CA or a GST practitioner to help you.

Can you explain the difference between ASMT-10 and DRC-01?

ASMT-10 is a notice for scrutiny that points out discrepancies in returns – it is not a demand. Then again, DRC-01 is a show-cause notice that alleges that tax is due, and it is a much more serious legal matter.

What will be the consequences if I do not respond by the deadline?

The officer is authorized to pass an ex parte order and raise a tax demand. Section 79 recovery can be initiated, including attachment of bank accounts. An independent appeal is also available.

Is GST registration cancellation possible if I do not respond to a notice?

Not really. Only REG-17 often means cancellation. Last-stage non-compliance with other notices can cause suspension or cancellation, which is used as a recovery measure.

Which documents should I provide, plus my response?

GSTR-1, GSTR-3B, GSTR-2B, purchase/sales invoices of the questioned period, ITC reconciliation statements, bank statements, and all the correspondence that took place.