GST (Goods and Services Tax) is a comprehensive, multi-stage, destination-based tax levied on the supply of goods and services in India. It replaced multiple indirect taxes and is designed to create a single, unified market, simplifying tax administration, and reducing the tax burden on businesses and consumers.
Recent Updates
In the Union Budget 2024, the Finance Minister proposed the introduction of Section 74A in the CGST Act. This aims to establish a unified time limit for issuing demand notices and orders related to demands for FY 2024-25 onwards, covering both cases involving charges of fraud, suppression of facts, or wilful misstatement, and those not involving such charges. Additionally, the time allowed for taxpayers to benefit from a reduced penalty by paying the demanded tax along with interest is extended from 30 days to 60 days.
*This provision will take effect once notified by the CBIC.
What is a GST notice?
A GST notice is an official communication issued by the tax authorities under the Goods and Services Tax (GST) regime in India. It is sent to taxpayers for various reasons related to GST compliance, such as discrepancies in GST returns, delays in GST payment, or mismatches in input tax credit claims. GST notices can be viewed and responded to through the GST portal.
Key reasons for issuance:
- Discrepancies: Differences found between the data reported in different GST returns or between supplier and recipient returns.
- Non-compliance: Failure to adhere to GST laws and rules, such as late filing of returns or non-payment of GST.
- Input Tax Credit (ITC): Issues related to the claim of input tax credit, such as ineligible claims or mismatches.
- GST refund: Clarifications are required for processing GST refund claims.
- GST Registration: Issues or discrepancies found during the GST registration process.
Responding to a GST notice promptly is crucial to avoid penalties and ensure smooth GST compliance. The GST portal facilitates easy access and response to these notices, ensuring adherence to GST rules and regulations.
What are the reasons for receiving GST notices?
- Mismatch in GSTR 1 and GSTR 3B: Discrepancies between the reported sales in GSTR 1 and the tax liability in GSTR 3B.
- Mismatch in GSTR 3B and GSTR 2A: Differences between the tax credits claimed in GSTR 3B and the supplier's details in GSTR 2A.
- Non-filing or late filing: Delayed or non-submission of GST returns like GSTR 1, GSTR 3B.
- Inconsistencies in e-way bills: Errors or mismatches in e-way bill data against actual transactions.
- GST audit issues: Irregularities found during a GST audit.
What are the types of notices under GST?
Here's a table summarising the various GST notices, action required, time limits, and consequences of non-response:
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 |
Notice to non-filers of GST returns in GSTR-1, GSTR-3B, GSTR-4, or GSTR-8 |
File pending GST returns with late fees and interest |
15 days from receipt |
Tax assessed based on available information. Penalty of Rs. 10,000 or 10% of tax due is charged, whichever is higher. |
2 |
CMP-05 |
Show cause notice questioning eligibility for the composition scheme |
Justify eligibility |
15 days from receipt |
Penalty under Section 122, possible denial of benefits of the composition scheme. |
3 |
REG-03 |
Notice for clarification during GST registration or amendment may be issued, requiring additional information or documents for verification. |
Reply with clarification in REG-04 |
7 working days from receipt |
Application rejection. Applicant is informed via REG-05. |
4 |
REG-17 |
Show cause notice for possible GST registration cancellation for the reasons mentioned in the notice |
Reply in REG-18 with reasons for retention |
7 working days from receipt |
GST registration cancellation in REG-19 |
5 |
REG-23 |
Notice regarding the reasons for revoking the cancellation of GST registration |
Reply in REG-24 |
7 working days from receipt |
The cancellation the GST registration will be lifted. |
6 |
REG-27 |
Notice for revocation of GST registration may be issued in REG-26 if taxpayers transitioning from the VAT regime fail to apply after receiving provisional registration or provide incorrect or incomplete information within the stipulated time frame. |
Apply in REG-26 and appear before authority |
Not specified |
Provisional registration cancellation in REG-28 |
7 |
PCT-03 |
Show cause notice for GST practitioner misconduct |
Reply within the time prescribed in the notice |
As specified in notice |
Licence cancellation |
8 |
RFD-08 |
Show cause notice for GST refund rejection |
Reply in RFD-09 |
15 days from receipt |
Order rejecting GST refund application in RFD-06 |
9 |
ASMT-02 |
Notice for additional information for provisional assessment |
Reply in ASMT-03 with documents |
15 days from receipt |
Rejection of application for provisional assessment. |
10 |
ASMT-06 |
Notice for additional information for final assessment |
Reply within 15 days of receipt |
15 days from receipt |
ASMT-07 passed without taxpayer's views |
11 |
ASMT-10 |
Scrutiny notice for discrepancies in GST returns |
Reply in ASMT-11 explaining discrepancies |
30 days from receipt or as specified |
Assessment based on available information, possible prosecution and penalty |
12 |
ASMT-14 |
Notice for assessment under section 63—grounds for conducting the assessment based on best judgment. |
Reply in writing and appear before authority |
15 days from receipt |
Assessment order in ASMT-15 |
13 |
ADT-01 |
Notice for audit by tax authority under Section-65 |
Attend in person or produce records |
As prescribed in notice |
Presumed lack of books of accounts, proceedings initiated |
14 |
RVN-01 |
Notice, under Section-108, for revision of appeal order |
Reply within prescribed time or appear before authority |
7 working days from receipt |
Case decided ex parte on available records |
15 |
Anti-profiteering Enquiring Notice |
Notice for not passing on ITC benefits or reduced GST rates |
Cooperate and provide evidence |
As specified in notice |
Ex parte proceedings based on available evidence |
16 |
DRC-01 |
Show cause notice for tax demand issued for tax payments that are overdue or unpaid, regardless of intent to defraud, and includes a detailed statement in DRC-02 |
Respond using DRC-03 to make the tax payment requested in the notice, including any applicable interest and penalties. Alternatively, utilise DRC-06 to address the show cause notice. *Note: Penalties apply only if payment is not made within the thirty-day limit and no fraud is involved. |
30 days from receipt |
Higher penalty or prosecution, order within three years from due date of annual returns |
17 |
DRC-10/DRC-17 |
Notice of auction for tax recovery under section 79 OR |
Pay outstanding demand as per DRC-09 |
As specified in notice (not before 15 days) |
E-auction and sale of goods |
18 |
DRC-11 |
Notice to successful auction bidder |
Pay full bid amount |
15 days from auction date |
Re-auction by proper officer |
19 |
DRC-13 |
Notice of tax recovery from third person |
Deposit specified amount and reply in DRC-14 |
Not applicable |
Deemed defaulter, subject to prosecution and penalties |
20 |
DRC-16 |
Notice for attachment and sale of goods/shares under section 79 |
Prohibited from transferring or creating a charge on said goods |
Not applicable |
Prosecution and/or penalties for contravention |
This table presents a clear summary of the actions required and the potential consequences related to various GST notices. However, please note that this information is subject to change. For the most accurate and up-to-date information, kindly refer to the relevant government website.
What are the valid modes of sending GST notices?
- Registered email: notices sent to the taxpayer's registered email address.
- GST portal: notices are posted on the taxpayer's account on the GST portal.
- Physical delivery: notices are delivered to the taxpayer's registered business address.
- Courier: notices sent through courier services.
- Fax: In some cases, notices may be sent via fax.
- SMS: Alerts for notices may be sent through SMS to the registered mobile number.
Consequences of not responding to a GST notice
- Penalties: Financial penalties for non-compliance and late responses.
- Interest: Accrued interest on any unpaid taxes.
- Legal action: Initiation of legal proceedings for non-compliance.
- Cancellation of registration: Potential cancellation of GST registration.
- Assessment orders: Tax authorities may pass ex-parte assessment orders.
- Seizure of goods: Goods and assets may be seized for recovery of dues.
- Impact on business: Negative impact on business operations and reputation.
How to view notices on the GST portal?
- Log in: Access the GST portal and log in with your credentials.
- Navigate to dashboard: Go to the "Dashboard" section.
- Services menu: Select "Services" from the top menu.
- User services: Under "User Services," choose "View notices and Orders."
- List of notices: A list of all notices issued to you will be displayed.
- Select notice: Click on the specific notice to view details and download it if necessary.
- Response: Use the portal to respond to the notice if required.
Conclusion
Viewing notices on the GST portal is crucial for timely compliance and avoiding penalties. Regularly checking and responding to these notices ensures smooth business operations and adherence to GST laws. Additionally, maintaining good GST compliance can positively impact your credibility, aiding in securing a business loan for future expansion.
