How to Reply to a GST Notice: ASMT-10, DRC-01 and Section 74A Explained

Identify what you have received

GST notices come in many forms and the right response depends on the type. Check the form number, section, period and the reply date at the top. All notices are issued and replied to on the GST portal under Services, User Services, View Notices and Orders, so download the notice and any annexures from there.

How do sections 73, 74 and 74A apply?

Demands for financial years up to 2023-24 are raised under section 73 (no fraud) or section 74 (fraud, wilful misstatement or suppression). From financial year 2024-25, section 74A replaces both with a single framework. Under 74A, a show cause notice can be issued within 42 months of the due date of the annual return, and the order follows within 12 months of the notice, extendable by six months. No notice is issued if the tax involved is below ₹1,000.

Penalty under 74A is the higher of 10% of tax or ₹10,000 in non-fraud cases, waived if tax and interest are paid within 60 days of the notice. In fraud cases, penalty equals the tax, reduced to 15%, 25% or 50% for early payment at different stages.

Preparing the reply

Start by rebuilding the officer's numbers from your own records. Most scrutiny notices arise from mismatches between GSTR-1, GSTR-3B, GSTR-2B and e-way bills, so prepare a reconciliation explaining each difference. Attach invoices, ledgers, contracts and payment proof. Cite the relevant section, rule, circular or judgment for each legal point, and keep the tone factual.

• Notice and annexures
• Reconciliation of returns vs books vs GSTR-2B
• Invoices, credit notes and e-way bills
• Bank statements and payment proofs
• Contracts or purchase orders
• Relevant circulars and case law

Filing and hearing

Reply on the portal in the prescribed form and upload supporting documents within the size limits; keep the acknowledgement. Request a personal hearing in the reply. Section 75(4) requires an opportunity of hearing where requested or where an adverse decision is contemplated. If you need more time, apply for an adjournment in writing; adjournments are limited. If you accept part of the liability, pay it through DRC-03 with interest and say so in the reply.

After the order

The officer issues an order in DRC-07. If you disagree, file an appeal before the Appellate Authority in APL-01 within three months of the order, with the mandatory pre-deposit of a percentage of the disputed tax. Rectification of apparent errors can be sought separately. Do not ignore an order, because recovery proceedings, including bank attachment, can follow.

Common mistakes

Taxpayers often miss the reply date, reply without reconciliations, upload documents without explanation, or argue only on facts when the issue is legal. Another error is paying under protest without recording it properly, which complicates refunds later.

Step by step

1. 1Download the notice

   Get the notice and annexures from the GST portal.

2. 2Note the deadline

   Record the reply and hearing dates.

3. 3Identify the issue

   Map the section, period and amount involved.

4. 4Reconcile

   Rebuild the officer's figures from your books and returns.

5. 5Gather evidence

   Collect invoices, ledgers, contracts and payment proofs.

6. 6Draft reply

   Answer each point with facts, law and documents.

7. 7File on portal

   Submit in ASMT-11, DRC-06 or the relevant form and request a hearing.

8. 8Follow up

   Attend the hearing and track the order for appeal deadlines.