Direct answer
Do not automatically accept a GST demand, but do not dismiss a notice as routine accounting correspondence either. Download the complete document and annexures, identify the period, provision, amount and response deadline, and determine its stage. Scrutiny, a pre-notice communication, a formal show-cause notice and a final demand order require different responses.
Understand the forms
DRC-01 is generally the electronic summary of a show-cause notice; read the detailed notice and annexures as well. DRC-01A can serve as a pre-notice intimation and should not be mistaken for a compulsory preliminary document in every case. DRC-06 is the prescribed electronic reply form for relevant demand proceedings, while DRC-07 concerns an order or demand summary. An ASMT-10 scrutiny communication follows a different process.
Financial years change the legal framework
Distinguish Sections 73/74 for periods up to financial year 2023–24 from Section 74A for financial year 2024–25 onward. CBIC Circular 254/11/2025-GST dated 27 October 2025 addresses proper-officer assignment and monetary limits for Section 74A. The notice’s Central or State jurisdiction and the issuing officer’s competence require a fact-specific check.
The new provision does not automatically give every older notice the same limitation, penalty or closure options as a later-year demand. Identify the relevant year, issue date, allegation of fraud or suppression and applicable amendments or notifications. State GST and IGST provisions may also be relevant.
Organise the initial response
- Download the complete notice, attachments and communication or service record.
- Prepare a sheet of issues, periods, tax, interest, penalty and deadlines.
- Reconcile books with GSTR-1, GSTR-3B, GSTR-2B or the statements relevant to the period and the electronic ledgers.
- Request missing relied-upon material in writing.
- If more time is genuinely required, seek an extension promptly without assuming it has been granted.
Reconcile at the level of the allegation
For an ITC discrepancy, annual totals alone may not answer an invoice-specific objection. Identify supplier GSTIN, invoice number and date, value, tax, receipt of goods or services, payment and claim period. Separate timing differences, duplicates, credit notes, blocked credits and substantive eligibility. A genuine invoice does not, by itself, answer every condition under Sections 16/17.
For an output-tax difference, connect sales records, relevant e-invoice or e-way records, credit notes and returns. Separate admitted liability from disputed amounts. Use lawful corrections and explanations; do not change old records to manufacture an apparent reconciliation.
Structure the reply issue by issue
Start with the notice details and concise position. For each allegation, provide the factual answer, annexure reference and legal basis. Raise jurisdiction, limitation or inadequate-detail objections clearly where justified. Leaving the merits entirely unanswered is not always a sound strategy.
Conclude with specific requests: drop the disputed demand, give credit for an admitted payment, supply relied-upon documents and provide a personal hearing where appropriate. Section 75 contains relevant procedural safeguards, including the hearing requirement in the applicable circumstances. Make the hearing request explicit, comply with listing directions and preserve the record of attendance or adjournment. Filing a reply does not mean it has been accepted.
Preserve proof of final submission
Use the correct proceeding and form. Keep annexures legible and indexed, comply with size limits and complete the required DSC or EVC process through the authorised signatory. A saved draft is not a submitted response. Retain the acknowledgment, ARN where generated, submission time and exact attachments.
If the portal fails, preserve error evidence and raise a helpdesk grievance while seeking the lawful alternative or extension. A technical error does not automatically cancel the proceeding or extend every deadline.
Payment and appeal require separate decisions
Where liability is accepted, identify the correct provision, interest and available closure terms before using an appropriate route such as DRC-03. Merely funding the electronic cash ledger does not necessarily discharge the particular demand; verify application, adjustment and acknowledgment. Informal payments are not a remedy.
If a final adjudication order has already been passed, continuing to upload a show-cause reply may be ineffective. Section 107 ordinarily provides three months from communication for a first appeal, with a limited further month on sufficient cause. Examine the applicable admitted dues, pre-deposit and any specific notification or order. A portal grievance is not an appeal.
Example and common questions
A trader receives an ITC mismatch notice covering two years. Some invoices were claimed in a different period; others concern blocked-credit categories. These require different factual and legal answers. Calling every difference a portal error does not explain the case.
Does every notice allow fifteen days?
No. Check the notice type and governing provision.
Is a generic accountant’s letter sufficient?
A reasoned, indexed response and valid submission matter more than the letterhead.
What are the most avoidable mistakes?
Confusing a notice with a final order, missing the deadline and failing to retain proof of the response actually submitted.
Official sources and relevant provisions
- Central Goods and Services Tax Act, 2017 — India Code, as on 11 June 2026 — Sections 16–17, 29–30, 61, 73–75 including 74A and 107; current central text.
- CBIC Circular 254/11/2025-GST, 27 October 2025 — official Karnataka GST-hosted copy — Paragraphs 2(a), 3–5; Section 74A applies from FY 2024–25 and officer assignment/monetary limits.
- CGST Rules, Part B forms — CBIC official compilation — DRC-01, DRC-06 [rule 142(4)] and DRC-07; form purposes.
- GST Portal official user guide — FORM GST DRC-03 — Voluntary/before-SCN payment workflow; April 2025 onward Section 74A(8)/(9) options; payment-reference and attachment steps.
- CBIC Tax Information Portal — Section 107, appeals to Appellate Authority — Section 107(1), (4), (6)–(7); communication-based first appeal, limited condonation and payment framework.
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Legal disclaimer
This article provides general legal information and the author’s general analysis, not advice for an individual case. Reading it does not create an advocate–client relationship or guarantee an outcome. Laws, rules, policies and decisions can change. Obtain qualified advice on your documents, material dates, jurisdiction and deadlines before acting. This disclaimer does not claim blanket exemption from responsibilities imposed by applicable law.
Sources checked: 3 November 2026.