GST Notice Reply: Comprehensive Guide for Compliance

GST notice shall be served on a tax payer depending upon the motivation of the tax payer in evading taxes.

• Case I: No Fraud – And the motivation was not to evade taxes: This section applies to non-fraud cases wherein
  Tax is unpaid/short paid by the tax payer or,
  Refund is wrongly made by him or where,
  Input tax credit has been wrongly availed/utilized
  The proper officer (i.e., GST authorities) will serve a show cause GST notice on the taxpayer. The tax payer will then be required to pay the amount due, along with interest and penalty.
• Case II : Fraud - With the intention to evade taxes : This section applies to cases when there is reason for occurrence of fraud/ or involves any willful misstatement or suppression of facts and the intention was clearly to evade taxes where as a result of which:
  Tax is unpaid/short paid by the tax payer or,
  Refund is wrongly made by him or where,
  Input tax credit has been wrongly availed/utilized

Handling a GST notice: The points stated below are important to note while handling show cause GST notices -

• Acknowledge the Notice: Date of notice and receipt can differ. Always mark the date and time on the acknowledgement copy.
• Do Not Avoid Receiving SCN: Avoiding receipt is futile; it is considered served even if refused. Accept and respond promptly.
• Check for Time Barred Service: If the notice is issued beyond the permissible period, contest it with evidence.
• Understand the Limitation Period: SCN beyond one year must prove suppression of facts. For the five-year limit, suppression must be established.
• Pay Dues Before SCN is Issued: If you anticipate a notice and agree with the liability, pay the tax. SCN cannot be issued for already paid amounts.
• Right to Be Heard: If SCN enhances your liability or reduces a refund, you must be given a hearing.
• Challenge SCN Validity: You can challenge SCN based on facts, time, or jurisdiction.
• SCN Must Be Written: Verbal GST notices are invalid; SCN must be in writing.
• Specify the Amount: SCN must clearly state the demanded amount and any proposed penalty.
• SCN for Specific Period: It should clearly mention the period for which it is issued.
• Respond Within Stipulated Time: Ensure timely reply; seek an extension if necessary.
• Comprehensive Reply: Address all points raised in SCN. Provide documentary evidence where needed.
• Cite Relevant Case Laws: Support your response with case laws, if applicable.
• List of Evidence: Submit a list of documents you rely on.
• Request Personal Hearing: Even after submitting a reply, opt for a personal hearing.
• Seek Alternative Measures: If a penalty is imposed, argue for relief based on reasonable cause.
• Orders Are Appealable: Orders against SCN can be challenged through an appeal.
• Seek Professional Assistance: If unsure, hire a professional for drafting replies or representation.
• Build a Strong Defense: A well-prepared SCN reply sets a solid foundation for future actions.

1. GSTIN
2. Show cause notice Reference no. and Date
3. Legal name
4. Trade name, if any
5. Address of the Principal Place of Business
6. Reply to the notice (Content)
7. List of documents uploaded (Enclosures)
8. Verification : I _________________________________ hereby solemnly affirm and declare that the information given herein above is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom.
9. Signature of the Authorized Signatory
10. Date and Place

• Note 1: The reply should not be more than 500 characters. If it is more than 500 characters, then it should be uploaded separately.
• Note 2: Supporting documents, if any, may be uploaded in PDF format.