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    Goods & Service Tax (GST) Notices

    GST Notices are of different types like Show Cause notice, Demand notice, Scrutiny notice and others. These notices are issued to the taxpayers for certain reasons.

    What is Notice under GST

    Notices Under GST are the way of communication by the GST Authorities. These notices are sent to the taxpayers to remind them of any error noticed while filing GST. Also sometimes GST Authority sends notice -when the movement of goods occurs without paying taxes and suspiciously. GST sent these notices after receiving any information about the taxpayer or any hint from the other Government third parties. A notice can be known by different names like show cause notice, scrutiny notice, or demand notices, depending on the type of default or offence committed. The common reasons for receiving GST notices are taxpayers who are not registered under GST, not filling or delay in filing GST returns, short payment of GST, excess Input tax credit claims, etc. A taxpayer must respond to all the notices within the limit under the specific timeline. Any failure to respond to the notices will lead you to heavy penalties and other charges as per GST guidelines.

    Most common reasons for GST Notices

    Reasons for receiving GST notices from the GST department:

    • Scrutiny Notice: Mismatch in details reported between GSTR-1 & GSTR-3B
    • Differences in Input tax credit claims made in GSTR-3B and GSTR-2A
    • Haven’t filed GSTR-1 and GSTR-3B consecutively for six months
    • Inconsistent declaration in GSTR-1 and e-way bill portal
    • Non-reduction of prices due to reduced GST Rates with effect from the date notified by CBIC. A default by a taxpayer for not providing the benefit of reduced price to the consumer. The practice is known as profiteering. Several anti-profiteering steps will be taken by GST authorities to address the default and penalties will also be charged against the taxpayer.
    • Show cause notice (SCN) – Non-payment of GST liability (tax) or the short-payment of the tax with or without the intent to defraud
    • The Input tax credit is wrongly filed.
    • GST registration is not done by any business and does not discharge the liabilities and tax as per GST Act.
    • Inconsistencies in reporting of Exports in GSTR-1 with information available on ICEGATE. For example, the Shipping Bill on ICEGATE but not reported in GSTR-1
    • For furnishing any information related to records to be maintained by a taxpayer
    • Conduct of the audit by tax authorities
    • When the information required to complete the GST Registration, the response return is not provided to the GST authorities on time.

    Valid modes of sending GST Notices

    According to Section 169 of the CGST Act, there are different means of communicating the notices under GST. Any mode can be followed as long as it is under the GST Act guidelines. Different modes of receiving notices under GST are:

    • Doorstep delivery of the notice either directly or by a messenger by a courier to the taxpayer or his representative.
    • Through a speed post or courier on the given address of the business of the taxpayer.
    • Notice through the email address
    • Making it available on the GST portal after logging in.
    • By publication in a regional newspaper of the locality of the taxpayer based on the last residential address provided by the taxpayer.
    • If none of the above means is used, then by affixing it in some prominent place at his last known place of business or residence.

    If this is not found reasonable by the GST authorities, they can place a copy on the notice board of the office of the concerned officer.

    The taxpayer does not need to respond to the notice sent via other methods except than these modes.

    Respond to the GST notices

    Any response to the GST notices can be done through the online portal of the GST. A taxpayer can use the digital signature for verification purposes. If the taxpayer doesn’t respond to the GST notice on time, she/he has to pay a penalty according to the GST law.

    A taxpayer can hire professional chartered accountant services to respond to the GST on time and in the right format. The chartered accountant can also talk to the GST authorities on your behalf.

    Frequently Asked Questions

    What is the maximum penalty for GST?

    According to the GST law, the maximum late fee is Rs 10,000 up to May 2021. The Government can charge Rs 5,000 for each return filing.

    How to know if one has a show-cause notice in his GST refund?

    Login to the GST portal with ARN. Go to navigate services>refunds>track application status and enter ARN. Select the Update Bank Account button.

    How do I avoid the GST penalty?

    If you have purchased or sold any goods, then file the returns. You can ask the Assessing Office to cancel your GSTIN from that particular month to save the GST penalty.

    How do I submit a response to the GST notice?

    You can submit the response of the GST notices online on the GST portal. For authorization, a taxpayer can use a digital signature. Pay and clear all the dues as per the GST notice.

    Types of Notices under GST law

    A quick guide on the different types of notices that can be received by the taxpayers, action to be taken by such taxpayers and time limit to respond to notice is available below:

    Sl no Name of the Form- Notice Description Reply or Action to be taken Time limit to respond Consequence of non-response
    1 GSTR-3A Default notice to non-filers of GST returns in GSTR-1 or GSTR-3B or GSTR-4 or GSTR-8 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 15 days from the date of receiving notice Tax is assessed to the best judgment using the information available with the department.   The penalty will be applicable of Rs. 10,000 or 10% of the tax due, whichever is higher.
    2 CMP-05 Show cause notice – Questioning the eligibility to be a composition dealer Must justify reasons as to why the taxpayer should continue to be eligible for the composition scheme 15 days of receipt of the notice The penalty stipulated under section 122 and order in CMP-07 denying the benefit of composition scheme
    3 REG-03 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
    Reply letter in REG-04 with clarification or the information Within 7 working days from the date of receiving the notice Reject such application and inform the applicant electronically in REG-05.
    4 REG-17 Show cause notice why should the GST registration not be cancelled for the reasons laid down in the notice Reply letter in REG-18 with the reasons for non-cancellation of GST registration Within 7 working days from the date of receiving the notice Cancellation of GST registration in REG-19
    5 REG-23 Show cause notice why the cancellation of GST registration must be revoked, for the reasons laid down in the notice Reply letter in REG-24 Within 7 working days from the date of receiving the notice Cancellation of GST Registration will be revoked
    6 REG-27 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
    Reply by applying in REG-26 and appear before the tax authority giving reasonable opportunity to be heard None prescribed Issue the cancellation of provisional registration in REG-28
    7 PCT-03 Show cause notice for misconduct by the GST practitioner Reply within the time prescribed in the show cause notice Within the time prescribed in the show cause notice Order the cancellation of the license as GST practitioner
    8 RFD-08 Show cause notice as to why the GST refund must not be made to the applicant (taxpayer) Reply letter in RFD-09 Within 15 days of receipt of notice Make an order in RFD-06 for rejecting the GST Refund application
    9 ASMT-02 Notice for Seeking Additional Information for provisional assessment under GST Reply in ASMT-03 along with documents Within 15 days from the date of service of this notice Application for provisional assessment may be rejected
    10 ASMT-06 Notice for seeking additional information for Final assessment under GST (for those who applied for provisional assessment) Reply in 15 days of receipt of the notice Within 15 days from the date of receipt of this notice ASMT-07 can be passed without considering the views of taxpayer being assessed
    11 ASMT-10 Scrutiny notice -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
    Reply in ASMT-11 giving reasons for discrepancies in the GST returns Within the time prescribed in the show cause notice or a maximum time of thirty days from the date of service of notice or such deadline notified Proceed to assess the taxpayer based on information at hand – may lead to prosecution and penalty
    12 ASMT-14 Show Cause Notice for assessment under section 63- reasons for conducting the assessment on the best judgment basis Reply in written form and appear before the GST authority issuing the notice Within 15 days of notice Assessment order in ASMT-15, may not be favouring the assessee
    13 ADT-01 Notice for conducting audit by Tax authority under Section 65 Attend in person as directed in the notice or produce records Within the time prescribed in the notice If not, it is presumed that taxpayer does not possess books of accounts and proceedings will be initiated
    14 RVN-01 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
    Reply within the prescribed time and/or appear before the GST authority passing the order of revision on a given date and time Within 7 working days from the date of service of the notice The case will be decided ex parte on the basis of available records and on merits
    15 Notice of Enquiry by Directorate of Anti-profiteering Where the supplier has not passed on the benefit of ITC or 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.
    Cooperate in the proceedings and provide evidence, if any As may be specified in the notice Proceedings will be initiated ex parte on the basis on available evidence.
    16 DRC-01 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 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 *Note: Where no fraud is committed, the penalty is
    chargeable only if payment is made beyond the thirty days time limit
    Within 30 days of receipt of the notice Order can be passed with higher penalty or prosecution- within three years from the due date of annual returns for the particular financial year for which tax is demanded
    17 DRC-10   And   DRC-17 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 Recovery through execution of
    Must be able to pay the outstanding demand as per DRC-09 As may be specified in notice before the sale. Note that the last day of the bid or the last day of the auction cannot be before 15 days from the date of issue of the notice Proceed to e-auction and sale
    18 DRC-11 Notice to the successful bidder Pay the full bid amount Within the 15 days from the date of the auction The proper officer can conduct a re-auction
    19 DRC-13 Notice of Recovery of outstanding tax from a third person Deposit the amount specified in the notice and reply in DRC-14 Not applicable Deemed to be a defaulter in respect of the amount specified in the notice and can be subject to prosecution and penalties
    20 DRC-16 Notice for attachment and sale of immovable/movable goods/shares under section 79 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 Not applicable Any contravention of the notice can invite prosecution and/or penalties