Quick answer
Download the notice and its annexures from the GST portal. Check the section, tax period and time limit. Reconcile your returns and books against the officer's figures. Then file a point-wise reply in DRC-06 within the time stated (usually 30 days), and ask for a personal hearing.
1. Understand what you have received
Form GST DRC-01 is the summary of a show cause notice (SCN), uploaded on the portal under Rule 142(1). The actual notice, with the officer's reasons and calculations, is attached to it. It is often preceded by DRC-01A, an intimation that gives you a chance to pay or object before the SCN is issued.
Find it on the portal under Services → User Services → View Additional Notices/Orders. Download every attachment.
2. Check the basics before anything else
- Section. Section 73 covers short payment without fraud. Section 74 alleges fraud, wilful misstatement or suppression, and carries heavier penalties. For FY 2024-25 onwards, both are replaced by Section 74A.
- Time limit. Under Section 73, the order must be passed within 3 years of the due date of the annual return. Under Section 74 the limit is 5 years. Under Section 74A, the notice must be issued within 42 months of that due date. Deadlines for FY 2017-18 to 2019-20 were extended by notification, so check them carefully.
- Jurisdiction. Is the notice from the officer who actually administers your GSTIN (State or Centre)?
- Authenticity. Notices from CBIC officers should carry a Document Identification Number (DIN).
- Relied-upon documents. If the notice relies on documents you have not been given, ask for them in writing.
A notice that is time-barred, issued by the wrong officer or wrongly issued under Section 74 can fail on that point alone.
3. Gather your documents
- GSTR-1, GSTR-3B and GSTR-9/9C for the period
- GSTR-2A / GSTR-2B and your purchase register
- Ledgers, sales and purchase invoices, e-way bills
- Payment challans, bank statements and credit notes
- Earlier correspondence with the department on the same issue
4. Reconcile before you write
Most demands start from mismatches: GSTR-3B vs GSTR-2B input tax credit, GSTR-1 vs GSTR-3B turnover, or returns vs books. Rebuild the officer's working invoice by invoice. Separate genuine short payment from timing differences, amendments in later months, and data entry errors. This reconciliation becomes the annexure that wins or loses the case.
5. Draft the reply
A strong reply usually has this structure:
- Brief facts of your business and the notice
- Preliminary objections: limitation, jurisdiction, wrong invocation of Section 74, missing documents
- A point-wise response to each allegation, with reconciliations attached
- The legal provisions, CBIC circulars and court judgements you rely on
- Your computation of any amount actually payable
- A request for a personal hearing
Be precise. Do not admit anything you have not verified: the reply becomes the record the appellate authority and the Tribunal will read later.
6. Consider paying what is genuinely due
If part of the demand is correct, paying it early reduces penalties. Under Section 73, paying tax and interest within 30 days of the SCN ends those proceedings with no penalty. Under Section 74, the penalty is 15% of the tax if paid before the SCN, and 25% if paid within 30 days of it. Payments are made through DRC-03.
7. File the reply in DRC-06
Open the notice under View Additional Notices/Orders, go to the Replies section and file the reply with your annexures in PDF. Opt for a personal hearing, and download the acknowledgement once filed.
8. Attend the personal hearing
Under Section 75(4), a hearing must be given if you ask for one in writing or if an adverse decision is contemplated. Up to three adjournments can be granted. Go prepared to walk the officer through your reconciliation, and file written submissions of what was argued.
9. After the order
The decision comes in DRC-07. If it goes against you, an appeal in APL-01 must be filed within 3 months, with 10% of the disputed tax as pre-deposit. See our appeal time limits table.
Common mistakes
- Replying with a one-line denial and no documents
- Missing the reply date and getting an ex-parte order
- Accepting the officer's figures without reconciling them
- Not raising limitation or jurisdiction at the first stage
- Not asking for a personal hearing
Frequently asked questions
How many days do I get to reply to a GST show cause notice?
The notice states the time allowed, commonly 30 days. You can request more time in writing, but extensions are at the officer's discretion, so start immediately.
Can I pay the demand and close the case?
Yes. Under Section 73, paying the tax and interest within 30 days of the show cause notice closes the proceedings without penalty. Under Section 74, the penalty drops to 25% of the tax if paid within 30 days. Pay only what you accept as correct.
What happens if I don't reply?
The officer can pass an order confirming the full demand without hearing your side. You would then have to appeal with a 10% pre-deposit, starting from a weaker record.
This guide is general information based on the CGST Act, 2017 as amended, reviewed 16 October 2026. It is not advice on your specific notice.