GST Notice — Types, How to Reply & Assessment Proceedings Guide
By Parul Singh, GST Practitioner · GST Compliance · Updated June 2026
Table of Contents
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Types of GST Notices
In my 15+ years as a GST Practitioner in Karol Bagh, I have handled over 500 GST notices for businesses across Delhi. Receiving a GST notice can be stressful, but understanding what type of notice you have received is half the battle won.
| Notice Type | Section | Purpose |
|---|---|---|
| Return filing notice | Section 46 | You have not filed returns |
| Assessment (non-filer) | Section 62 | Assessment for non-filers |
| Scrutiny notice | Section 61 | Discrepancies found in returns |
| Show Cause (no fraud) | Section 73 | Tax short-paid without fraud |
| Show Cause (fraud) | Section 74 | Tax short-paid with fraud |
| Audit notice | Section 65 | GST audit by department |
| Investigation | Section 67 | Search, seizure, inspection |
Official Reference: Section 73 of the CGST Act 2017 deals with tax not paid/short-paid without fraud. Section 74 deals with cases involving fraud. The penalty provisions differ -- Section 73 has reduced penalty, Section 74 attracts penalty up to 100% of tax.
Show Cause Notice -- Section 73 and 74
| Feature | Section 73 (No Fraud) | Section 74 (Fraud) |
|---|---|---|
| Time limit | 3 years from due date | 5 years from due date |
| Penalty | 10% of tax (₹10,000 minimum) | 100% of tax |
| Pre-deposit for appeal | 7.5% of disputed tax | 7.5% of disputed tax |
📍 Real Example -- Connaught Place Trader Gets SCN
A readymade garment trader in Connaught Place received a Section 73 notice for ₹3.6 lakh -- the department found that his GSTR-1 sales exceeded GSTR-3B reported sales by ₹40 lakh. I helped him file a reply explaining it was an inadvertent double-entry in GSTR-1, supported by reconciliation. The authority accepted the reply and dropped the demand -- saving him ₹8 lakh.
How to Draft a Reply to GST Notice
- Read the notice carefully -- understand the specific allegation
- Gather supporting documents -- invoices, returns, bank statements
- Prepare a point-wise reply -- address each allegation individually
- Attach supporting evidence -- every claim must be backed by a document
- File within the time limit -- typically 15-30 days
- Request a personal hearing -- always ask for one under Section 75(4)
💡 Pro Tip from Parul: Never ignore a GST notice. If you do not respond, the officer can pass an ex-parte order confirming the full demand. I have seen businesses in Kirti Nagar lose ₹10-50 lakh because they thought ignoring the notice would make it go away. WhatsApp me at +91 95401 04776 if you need help with any GST notice.
Assessment Proceedings
After your reply, the officer will pass an order. Possible outcomes:
- Order dropped -- no liability
- Partial demand confirmed
- Full demand confirmed -- tax + interest + penalty
If you disagree, file appeal within 3 months with 7.5% pre-deposit of disputed tax.
⚠️ Common Mistake: Many businesses make the mistake of not paying the pre-deposit. Without it, your appeal is not maintainable. Interest under Section 50 continues to accrue at 18% per year until the appeal is decided.
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Frequently Asked Questions
What is the time limit for issuing a GST notice?
Section 73 (no fraud): 3 years from due date of annual return. Section 74 (fraud): 5 years from due date.
Can I settle a GST notice without going to court?
Yes. For Section 73, you can pay tax + interest + 10% penalty within 30 days for early settlement.
What happens if I do not reply to a GST notice?
The officer will pass an ex-parte order confirming the demand. Recovery can be through bank attachment, property attachment, or arrest.
Is there a pre-deposit for GST appeal?
Yes. 7.5% of the disputed tax (maximum ₹50 crore) must be deposited before filing an appeal.
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