GST Notice Reply Format: ASMT-10, DRC-01 and Show Cause

A GST notice rarely arrives because someone has read your return closely. It arrives because a formula has matched your GSTR-1 with your GSTR-3B, or your e-way bills with your outward supplies, and produced a number that does not reconcile. The notice is the department asking you to explain the gap. Your reply is the explanation, and in most cases it decides the case.

The GST notice reply format depends on which form you have received. This guide covers the three notice families that account for most GST litigation — ASMT-10 scrutiny, DRC-01A and DRC-01 show cause, and the registration show-cause — with the reply structure, the annexures that matter, and the timelines that cannot be missed.

Know which notice you have

The form number is on the notice and in the subject line on the portal. Each has a different reply form, a different officer and a different consequence.

Section 73 applies to a genuine error — a short payment, an under-reported supply, an excess input tax credit claimed by mistake — where there is no element of fraud or wilful suppression. Section 74 applies where fraud, wilful misstatement or suppression of facts is alleged, and carries a heavier penalty. The section number tells you how serious the department considers the matter, and the reply should be calibrated accordingly: a Section 73 notice is answered with a reconciliation and a correction; a Section 74 notice requires you to rebut the allegation of intent, not merely the arithmetic.

The GST notice reply format and structure

The GST portal's reply forms have limited free-text fields. Attach a detailed reply as a PDF and use the form field to summarise it and reference the attachment. The PDF should follow this structure.

Heading block

GSTIN, legal name, trade name, principal place of business, the notice form and reference number, the notice date, the tax period and the name of the authority. Quote the ARN of the notice from the portal dashboard.

Paragraph one: the notice and the reply

State that you are replying to the notice, within time, and that you have enclosed the documents relied on. If you are seeking an adjournment for a personal hearing, ask for it here with a proposed date.

Point-wise response

Reproduce each discrepancy from the notice under its own heading and answer it. The department's notices usually list the discrepancy in a table — tax period, return type, reported value, system-derived value, difference. Your reply should mirror that table and add three columns: the reason for the difference, the documentary support, and the amount accepted as payable, if any.

The reconciliation statement

This is the core annexure. For an outward supply mismatch, reconcile GSTR-1 with GSTR-3B and with the books: turnover as per books, turnover as per GSTR-1, turnover as per GSTR-3B, and the differences explained by credit notes, debit notes, amendments, exports, exempt supplies and supplies liable under reverse charge. For an input tax credit mismatch, reconcile GSTR-2B with the credit availed in GSTR-3B, explaining credits not reflected, credits reflected but not availed, and credits availed in a later period.

Legal submissions

Where the demand rests on an interpretation of law — the taxability of a particular supply, the place of supply, the availability of a credit, the time of supply — set out the provision, the notification or the circular, and the reason your treatment is correct. A reply that argues only facts and ignores the legal basis leaves the officer with no option but to apply the department's reading.

Prayer and declaration

State what you want: that the proposed demand be dropped, that the proceedings be closed, or that the matter be kept pending while an application is decided. Where you accept a part of the demand, say so explicitly and pay it with interest through DRC-03 — a partial voluntary payment is treated far more leniently than a contested demand that is later confirmed.

Replying to an ASMT-10 scrutiny notice

ASMT-10 is the least adversarial of the GST notices. It is a scrutiny of the return, and the officer has not yet formed a view. The reply should be explanatory rather than defensive. Where the discrepancy is real and small, accept it and pay; where it is a timing difference or a reporting error later corrected, show the correction in the subsequent return.

The reply must be filed in ASMT-11 within the period stated, generally thirty days. If the officer is not satisfied, an order in ASMT-12 follows, which is appealable. Do not ignore an ASMT-10 because the amount is small — an unanswered scrutiny becomes a confirmed demand with interest and penalty, and the appeal cost exceeds the tax.

Replying to a DRC-01A intimation

DRC-01A is the department's pre-show-cause intimation that it has ascertained tax as payable. It is an opportunity, not a demand. The reply at this stage can prevent a DRC-01 from being issued at all, which saves the penalty exposure and the litigation.

Three options exist at this stage, and the choice matters. First, accept the ascertained amount and pay it through DRC-03 with interest; under Section 73, payment before a show cause generally avoids penalty. Second, contest it with a detailed reply explaining why no tax is payable. Third, accept part and contest part, paying the accepted portion and explaining the balance. The third option is often the most credible where the discrepancy is partly a genuine error.

Replying to a DRC-01 show cause

The show cause sets out the allegations, the sections invoked and the amount proposed. The reply in DRC-06 must answer each allegation. The key elements:

• Limitation objection — under Section 73, an order must be passed within the period prescribed from the annual return due date; under Section 74, a longer period applies. If the notice is time-barred, say so first, with the dates.
• Jurisdiction objection — whether the officer issuing the notice is the proper officer for your registration.
• Factual rebuttal — the reconciliation and the documents.
• Legal submissions — the provision, circular or judgment relied on.
• Request for a personal hearing — a mandatory facility before an order is passed, and the reply should ask for it in writing.
• Without prejudice acceptance — where you accept part of the demand, state it as "without prejudice" and pay it, so that the acceptance is not treated as an admission on the contested portion.

Registration show-cause and suspension

A REG-17 notice proposing cancellation on grounds such as non-filing of returns, failure to commence business, or a discrepancy in registration particulars requires a reply within seven days. Suspension may take effect while the notice is pending, which freezes the issuance of tax invoices and stops the business.

The reply should address the ground directly. For non-filing, attach the returns filed and the payment challans; if returns could not be filed because the portal blocked them, attach screenshots of the errors. For a discrepancy in particulars, file the amendment application and attach its acknowledgement. A request for revocation follows once the cancellation order is passed, and it must be made within the period prescribed, with the returns and tax paid up to date.

Appeal and the pre-deposit

An order confirming a demand can be appealed to the Appellate Authority in APL-01, generally within three months of communication of the order. The appeal must be accompanied by a pre-deposit of a percentage of the disputed tax — ten per cent of the tax in dispute, subject to the cap prescribed in the Act, with equal amounts under the central and state levies. The pre-deposit is a condition for the appeal to be entertained, not a final payment; it is adjusted against the final liability.

Where the order is passed without a personal hearing or without considering the reply, that is a procedural defect and a ground of appeal. Where the order is based on a circular that has since been clarified, the clarification is a ground too. The appeal memorandum should attach the notice, the reply, the acknowledgement, the order and the reconciliation, and should identify each ground separately rather than arguing the whole case in one paragraph.

Mistakes that turn a discrepancy into a demand

• Not replying at all. The officer confirms the demand, and the appeal becomes an uphill fight against an ex parte order.
• Replying outside the portal. An email or a physical letter is not a reply in the statutory form.
• Answering the total without the period-wise break-up. GST demands are period-specific; a lump-sum explanation leaves each period unexplained.
• Ignoring the difference between Section 73 and 74. A reply that treats a fraud allegation as an arithmetic error does not rebut intent.
• Claiming a credit without GSTR-2B support. The officer will check the auto-populated credit statement; a credit not reflected there needs a documented explanation.
• Paying without stating what the payment settles. A DRC-03 payment made without linking it to the notice can be treated as an admission on the whole demand.
• Missing the appeal window while negotiating. Correspondence with the officer does not extend the appeal period.

Frequently asked questions

Is ASMT-10 a demand notice?

No. It is a scrutiny notice listing discrepancies. It becomes a demand only when an order in ASMT-12 is passed confirming the tax. But it must still be replied to within the period stated, or the officer may proceed on the material available.

What is the difference between DRC-01A and DRC-01?

DRC-01A is a pre-show-cause intimation that gives you a chance to pay or explain before a formal show cause. DRC-01 is the formal show cause under Section 73 or 74. Responding at the DRC-01A stage can prevent the DRC-01 from being issued and can avoid penalty.

Can I pay the tax and close the matter?

Yes, in a genuine error case. Payment through DRC-03 with interest, before a show cause is issued, generally avoids penalty under Section 73. Where fraud is alleged under Section 74, payment reduces the penalty but does not eliminate the proceeding. Take advice before paying a Section 74 demand in full, because payment can be treated as an admission.

Do I get a personal hearing?

Yes. A personal hearing is a mandatory facility before an order is passed, and the reply should request it in writing. Where the officer passes an order without granting a hearing that was requested, that is a procedural defect and a ground of appeal.

How long do I have to appeal an order?

Generally three months from the date of communication of the order, with the pre-deposit of the prescribed percentage of disputed tax. Where the appeal is filed late, an application for condonation with reasons must accompany it. Do not rely on correspondence with the officer to preserve the period.

Drafting Support

Our drafting team prepares GST notice replies — ASMT-11 responses, DRC-06 show-cause replies, period-wise reconciliations and appeal memoranda — with the annexures indexed to each allegation.