Over the years, the GST system has evolved, and more taxpayers have adopted and adapted to indirect taxes in GST. However, there are times when there are discrepancies, non-compliance, incomplete documentation, or errors made during returns filing. In such times GST notices are issued as a formal communication to notify taxpayers of the pertaining issues. It’s vital therefore, that as a taxpayer you understand what is a GST notice, its different types (e.g., demand notice, show cause notice, etc.), why GST notices are issued, how to search GST notices on the portal, and how to respond to one.

For more information, visit the GST official website: //www.gst.gov.in/

What are GST notices?

GST notices are formal communications sent by the GST authorities to taxpayers and businesses for non-compliance. These communications enable the GST authorities to manage compliance requirements, and gives taxpayers the opportunity to provide an explanation, rectify a filing error, submit a missing document, update information, and fix any other discrepancy that might have occurred during returns filing or at any other stage.

Frequency of issue: The frequency of issuing a GST notice depends on the compliance error made. That is, irregularities and discrepancies in taxpayer’s GST records are more likely to receive frequent GST notices, while those with properly audited financials and timely returns submissions will not.

GST notice example: A taxpayer might receive a GST notice if there are discrepancies in data with regards to Input Tax Credit (ITC) claims, i.e., mismatch between GSTR-2A/2B and GSTR-3B data.

As a taxpayer, it’s imperative that you respond to GST notices at the earliest with supporting documents to resolve the issue raised and keep your business GST complaint.

Reasons why GST notices are issued

There are several reasons or causes why authorities issue GST notices. While non-compliance, discrepancy, errors are the common causes, here’s a more detailed outlook on the different GST notices reasons that exist.

Mismatch in Returns:

A notice may be issued if there are discrepancies between the sales reported (GSTR-1) and the returns filed by the supplier GSTR-3B. For example, ITC details (output) provided by the supplier (GSTR-2A and GSTR-2B) not matching ITC claims by the taxpayer (GSTR-3B).

Incorrect or Non-filing of Returns:

If accurate sales figures are not reported (i.e., under-reporting sales to evade taxes) or due dates for filing GST returns are missed, it can trigger GST notice issuance. For instance, if GSTR-1 and GSTR-3B filings have been delayed for over 6 months, GST notices will be issued.

Discrepancy in tax payments:

When authorities identify any discrepancies between payment of taxes (i.e., paid vs actual), there will be notices issued. For examples, if details provided in GSTR-9 and GSTR-9C are not aligned to the other return forms, the authorities can issue a GST notice to provide additional information/documents.

Inconsistent claims of ITC and/or refunds:

Another reason for raising a GST notice is when there are inconsistent or excessive claims for Input Tax Credit or refunds. This can be due to an error in calculations, or incorrect utilization of GST ITC. Moreover, when taxpayers make GST appeals for refunds, it’s subject to scrutiny and verification and GST notices may be issued requesting additional documents or clarifications to support the GST refund claim, based on which it can be accepted or denied.

Audit checks:

The GST authorities conduct audit checks from time to time to ensure compliance. During such audits, if there are any irregularities, errors, or discrepancies identified, GST notices might be issued.

Miscellaneous reasons:

There are other reasons why GST notices can be issued to a taxpayer. For instance, an eligible business not registering for GST, or export related data mismatch between GSTR-1 and ICEGATE, or mismatch with the e-Way bill portal, or similar.

As can be understood, the causes of GST notice issuance and be plenty. As a taxpayer, it’s important that you address each notice and respond to it promptly to avoid any penalty or disqualification.

Also read: How to register for GST?

What are the different types of GST notices?

There are different types of GST notices that the tax authorities can raise. These GST notices types can be categorized under three broad categories: Demand notices, Show cause notices, and Scrutiny notices

We take a look at some of the common GST notice types that prevail.

• Form DRC-07 (GST Demand notice): Issued when there are taxes pending (outstanding) by the taxpayer and includes the amount due and any interest applicable
• Form REG-17 and REG-23 (GST Show cause notice): Issued when a taxpayer’s GST registration is being considered for cancellation due to non-compliance (REG-17), and its subsequent request for revocation of cancellation (REG-23)
• Form GST ADT-01 (Audit notice): Sent to taxpayers informing them of an impending audit highlighting the nature, duration and other details
• Form RFD-08 (Refund processing notice): Issued when the refund claim has issues, requesting the taxpayer to provide supporting documents to validate the claim or rectify any errors made
• Form GSTR-3A (Returns mismatch notice): Issued when there is discrepancy in data between what the taxpayer has submitted and the data available in the GST portal, e.g., inconsistencies in GSTR-1 and GSTR-2A forms
• Form COMP-05 (GST Composition scheme notice): Issued as a show cause notice on the eligibility of a taxpayer opting for the Composition Scheme
• Annual Return Scrutiny notice: Issued after annual return filing scrutiny for clarifications

There are several other GST notices types that the authorities send to taxpayers based on the nature of the notice.

Also read: GST return forms and what they mean  

How to reply to GST notices?

GST notices can be replied to on the GST portal by the taxpayer directly or any authorised tax consultant/CA. The notices must be responded to within the due timelines (usually 7 – 20 days ore as specified), in the required format, pending which additional fines or penalties can be imposed (such as cancellation of GST registration).

Here are some simple steps you should follow when responding to GST notices.

• Review the notice issued to understand the cause of notice
• Collate the required documents (e.g., GST e-Invoices, receipts, balance sheets, etc.) that will be required to validate your response
• Draft a proper response providing clarity on each of the issues raised and support it with attached documents (Note: If you have a tax consultant/CA, they will assist here)
• Submit your response on the GST portal within the due date to avoid additional penalties
• Track the status on the portal and ensure the issue is closed (Note: There might be additional documents requested or notices as the case may be)

How to search for GST notices?

GST is an online portal and all GST notices, return filing forms, registration certificates or any other can be found, viewed and downloaded online from the GST portal. You should also check your GST registered email address for any notifications on notices issued.

Here’s how you can find GST notices on the GST portal:

• Visit the official GST portal: //www.gst.gov.in//
• Log in to the portal with your credentials
• Follow the path: Services > User Services > View Notices and Orders
• Explore the page and click on the ‘View Notice(s) and Order(s)’ button
• Select options in the new page: Notices and Orders OR Additional Notices and Orders
• Search for GST Notices by entering details in the fields: Type, Issuance period (From and To)
• Download the relevant notice from the ‘Download’ option (click on the icon)

GST notices are issued to enable taxpayers and authorities to streamline tax compliances and ensure that there are reduces inconsistencies or evasions, and increased transparencies. As such, it is required for all taxpayers to acknowledge the notices issued by the GST authorities and respond to them to keep business GST compliant and avoid further challenges.

FAQs

How many types of GST notices are there?

There are numerous GST notices that the GST authorities can issue based on the cause of issuing a notice. In general, the GST notices can be categorised into three main types: Show cause notice, demand notice, and scrutiny notice.

Where can I find GST notices?

GST notices are available on the GST portal. You can log in to the portal using your credentials and navigate to the ‘Services > User Services > View Notices and Orders’ section from the dashboard. Here you can find the list of all notices issued and can also download the relevant GST notice.

What is GST show cause notice?

A show cause notice under GST is issued when the tax authorities find or suspect inconsistencies, discrepancies, errors or non-compliance as per GST rules. These notices request the taxpayer to provide proof or show cause why the non-compliance occurred and why there should be no penalties imposed. For instance, if a taxpayer has delayed filing GSTRs or claimed higher ITC than recorded data, a show cause notice might be issued.

*This article is for information only. For more details please visit the official GST website or consult with a GST practitioner or CA or tax consultant for professional advice.