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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesA GST show-cause notice is the substantive document: it sets out the proposed tax, interest and any penalty and asks the business to explain why that liability should not be paid. “Demand notice” is often used informally for the same proposed demand, but a final enforceable demand generally follows an adjudication order. For specified proceedings, an electronic FORM GST DRC-01 summary accompanies the notice; it does not replace the complete notice or its evidence.
Save the notice and service proof, identify the statutory section and tax period, reconcile every allegation to your records, file a point-by-point reply using the procedure stated in the notice, and keep the acknowledgement. Do not rely on a generic GST deadline: the applicable date depends on the notice, period, governing law and current portal instructions.
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The short answer: treat the show-cause notice as the case you must answer
Businesses commonly call any GST communication that proposes tax, interest or penalty a “demand notice.” Procedurally, the important distinction is whether you have received a show-cause notice (a proposal that still requires your explanation) or an adjudication order (a later decision that determines what is payable). The electronic forms attached to those stages are summaries, not substitutes for the underlying document.
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The CBIC-hosted text of section 73 describes a notice where tax was not paid or was short paid, an erroneous refund was made, or input tax credit was wrongly availed or utilised for a reason other than fraud, wilful misstatement or suppression of facts to evade tax. It says the proper officer serves a notice requiring the person to show cause why the specified amount, interest under section 50 and any leviable penalty should not be paid. Read the live statute before relying on that wording because the hosted page is not established here as a current consolidated Act: CBIC, The Central Goods and Services Tax Act.
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For the immediate response, the document that controls your work is the complete notice, including annexures and relied-upon material. A DRC-01 entry helps you locate the proceeding and check figures; it is not permission to ignore allegations that appear only in the full notice.
What each GST document does
Show-cause notice: the substantive proposal
A show-cause notice (SCN) states the department’s proposed grounds and calls for an explanation. It should be read as a set of specific issues to be proved or disproved, not as a bill that has already become final. The notice may allege short payment, an erroneous refund or wrongly availed or utilised input tax credit, and may calculate tax, interest and penalty separately.
Look for the statutory section, tax period, taxable value or credit amount, rate and calculation, factual allegations, evidence relied on, issuing authority and the instructions for responding. If an annexure contains invoice-level data, that annexure is part of the case even when the portal’s summary displays only totals.
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The cited CGST Rules compilation provides for an electronic summary in FORM GST DRC-01 for specified demand notices. Compare its section, period and figures with the signed or otherwise served notice. A discrepancy is a reason to investigate and raise the mismatch in your reply; it is not a reason to choose whichever figure is lower.
The rules PDF is a compilation dated 1 January 2022. Check subsequent amendments and the current portal workflow before treating a form field or filing route as unchanged: CGST Rules, 2017, Chapter XVIII: Demands and Recovery.
FORM GST DRC-06: the reply route identified in the rules
The cited rules state that a reply to a notice whose summary was uploaded in DRC-01 is furnished in FORM GST DRC-06. Confirm that the current notice uses this route and follow any updated GST portal instructions. Upload the complete signed reply and supporting files, then download the acknowledgement and the submitted package.
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FORM GST DRC-07: a later order and recovery stage
After adjudication, the rules describe FORM GST DRC-07 as an electronic summary of the order specifying tax, interest and penalty payable. The cited text says the order is treated as the notice for recovery. This is a different procedural stage from answering an SCN: once DRC-07 follows an order, check current review or appeal options and their deadlines instead of filing another generic SCN response.
Other forms you may see
The 1 January 2022 rules compilation also describes DRC-01A as a possible pre-notice communication for proceedings under sections 73 and 74, and DRC-03 and DRC-04 for payment reporting and acknowledgement in the circumstances stated there. Those references do not establish that every case will use those forms or that an older process still applies unchanged. Use the form and legal basis identified in the actual communication and verify current rules before making a payment or treating a pre-notice message as the final case.
Demand notice versus show-cause notice: the practical comparison
| Document or stage | Legal function | What the business should do |
|---|---|---|
| Show-cause notice | States proposed grounds and calls for an explanation of why the specified liability should not be paid. | Read every allegation and calculation, gather evidence and submit a reasoned reply by the applicable date. |
| FORM GST DRC-01 | Electronic summary accompanying specified demand notices under the Rules. | Match the summary to the complete notice and flag any difference in section, period or amount. |
| FORM GST DRC-06 | Reply form specified in the cited Rules for notices whose summary was uploaded in DRC-01. | Use the current filing route for the actual proceeding and retain proof of submission. |
| Adjudication order / FORM GST DRC-07 | Records the decision and the tax, interest and penalty payable; the cited Rules treat the order as the notice for recovery. | Move to the current recovery, review or appeal analysis; do not treat it as an invitation to submit an initial SCN reply. |
There is no single document called a “GST demand notice” that answers every case. The phrase may describe an SCN, a DRC-01 summary or a post-adjudication order. Identify the stage from the heading, section, form number and wording before deciding what to file.
What to do in the first 24 hours
- Preserve the record. Download the complete notice from the GST portal, including every annexure and attachment. Save the email, portal timestamp, physical delivery record or other evidence showing when and how it was served. Do not rely on a screenshot of the summary alone.
- Lock the tax period. Write down the financial year, return periods, registration number, GSTIN, issuing authority and the date on the notice. A claim for one period cannot safely be reconciled with records from another.
- Identify the statutory basis. Note the section and sub-section cited, whether the issue concerns output tax, an erroneous refund or input tax credit, and whether the notice alleges fraud, wilful misstatement or suppression. For periods from financial year 2024–25 onward, verify the current governing provisions and any applicable notification before relying on an older section number or consequence.
- Record the response instruction. Copy the response date, hearing information, portal path, form number and file-size or format limits into a working calendar. The date printed on a summary may not answer every procedural question; the notice and current law control.
- Freeze the amounts. Enter the proposed tax, interest and penalty separately in a worksheet. Add the source page or annexure for each number. Do not combine them into one unexplained total.
- Assign responsibility. Name an internal owner for records, a finance reviewer for calculations and a qualified GST professional for legal or high-value issues. Preserve the original data before anyone edits a reconciliation file.
How to test the department’s allegations
Build an allegation register
Create one row for every allegation, not one row for the entire notice. Use a register such as this:
| Field | What to capture |
|---|---|
| Notice reference | Document number, date, GSTIN, issuing office and service date. |
| Legal issue | Section, sub-section and whether the allegation concerns tax, refund, input tax credit, interest or penalty. |
| Period | Financial year, month or quarter and the relevant return. |
| Department’s figure | Taxable value or credit, rate, tax, interest and penalty, each tied to an annexure or paragraph. |
| Business position | Accepted, disputed, partly accepted or impossible to verify from the supplied material. |
| Evidence | Return, invoice, purchase register, e-way bill, contract, payment proof, ledger, reconciliation or earlier correspondence. |
| Requested correction | Deletion, reduction, correction of a factual error, release of evidence or another precise outcome. |
Reconcile to primary records
For an output-tax allegation, compare the notice’s transaction list with sales invoices, credit and debit notes, the general ledger, GSTR-1 data, GSTR-3B declarations and payment records for the same period. Check whether the department counted cancelled documents, duplicate invoices, exports, exempt supplies, reverse-charge transactions or amendments more than once.
For input tax credit, reconcile the challenged invoices to the purchase register, supplier tax invoices, goods-received or service-completion evidence, payment records, GSTR-2B or other relevant system data, and the return in which the credit was claimed. Separate a missing document from a disagreement about eligibility; they require different explanations.
For an alleged erroneous refund, map the refund application, supporting statements, sanction order, bank credit and the underlying export, inverted-duty or other category of claim. Confirm whether the amount in the notice is the refund itself, tax allegedly unpaid, interest, penalty or a combination.
Test arithmetic and period mapping
Reperform every calculation in a clean spreadsheet. Check the tax rate used, taxable base, rounding, amendments, credit notes, previous payments and the period over which interest is calculated. If the notice uses a consolidated figure, request or identify the transaction-level schedule needed to test it. A calculation that cannot be traced is a specific defect to raise, not a reason to send a blanket denial.
How to write a defensible reply
Use the notice’s numbering
Start with a short identification paragraph containing the GSTIN, notice reference, period and the form or portal route used. Then answer paragraph 1, allegation 1, annexure A and each subsequent item in the same sequence as the notice. This lets the officer and any later reviewer see which point has been answered.
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For each point, use three distinct parts:
- Facts: state what happened and correct dates, invoice numbers, return fields or payment entries.
- Legal position: explain why the cited provision does or does not apply, using the provision in force for that tax period.
- Amount: show the department’s figure, the adjustment and the resulting tax, interest or penalty position.
Attach an index and label files consistently. A useful attachment name identifies the allegation and evidence, for example Allegation-2_invoice-reconciliation.pdf. Keep an unaltered copy of every submitted file and the final generated acknowledgement.
Address partial agreement honestly
If one invoice or calculation is accepted, identify it and explain the remaining dispute. A precise admission can prevent an officer from treating the entire reply as evasive, while a precise disagreement preserves the issues that need determination. Do not sign a statement that silently concedes a larger amount than the records support.
Ask for missing material and a hearing where appropriate
If the notice relies on an unexplained spreadsheet, third-party data or an attachment you cannot access, identify the missing item and explain why it is necessary to respond. Follow the notice’s instructions for requesting a hearing or submitting further documents. Keep the request factual and tied to a particular allegation.
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Filing through the portal and preserving proof
- Open the GST portal proceeding identified in the notice and confirm the GSTIN, reference number, period and form before uploading anything.
- Select the response form specified for that proceeding. Where the notice summary was uploaded in DRC-01, the cited Rules identify DRC-06 as the reply form, but current portal instructions take priority.
- Upload the signed reply, index, reconciliation and supporting documents within the permitted file limits. If a file cannot be uploaded, describe it in the reply and use the alternative submission method expressly allowed by the notice.
- Submit only after checking that every allegation has a corresponding answer and attachment.
- Download the acknowledgement, ARN or submission receipt, the final rendered reply and the list of uploaded files. Record the exact submission time and the user account used.
- Send the internal file owner a read-only copy and preserve portal and email confirmations with the service evidence.
A portal summary that shows “submitted” is useful evidence, but it does not prove that an attachment opened correctly. Check the downloaded submission package and keep the original files.
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Deadlines: why a generic online answer is unsafe
The available statutory excerpts do not establish one universal response deadline for every GST notice, tax period and procedural route. Dates can depend on the section cited, the period involved, the manner of service, extensions, hearing directions and amendments to the Rules. Use the date and instructions in the actual communication, then verify the current governing law and portal guidance promptly.
| Question | What is established | What you must verify |
|---|---|---|
| When does the clock start? | The business should preserve evidence of when and how the notice was served. | The service rule and date applicable to this notice. |
| How long is the reply period? | No single period is established for all notice types in the cited material. | The notice, current section, Rules and any extension or hearing direction. |
| Does filing DRC-06 cure a late or incomplete response? | The cited Rules identify DRC-06 as a reply form in specified DRC-01 cases. | Whether the route, date and evidence satisfy the current proceeding’s requirements. |
| What if an order is already issued? | DRC-07 relates to an adjudication order and recovery stage. | Current review, rectification or appeal options and their deadlines. |
If the date is close, file a substantive response with the available evidence rather than waiting for a perfect bundle, while explaining any document that will follow through a permitted route. Obtain qualified advice immediately for a large amount, an older period, a fraud allegation or a possible limitation issue.
Should the business pay while the notice is pending?
Do not treat payment as automatically right or wrong. First establish whether the communication is a pre-notice message, an SCN, an order or a recovery communication; which section and period apply; how the amount was calculated; and what legal consequences attach to payment at that stage.
The 2022 Rules compilation refers to DRC-03 and DRC-04 in specified payment-reporting circumstances, but that older reference does not establish a universal payment option or current consequence. Have a qualified GST professional check the statutory basis, computation, accounting treatment, interest, penalty and effect on any later proceeding before paying. If the business pays an undisputed part, document exactly what the payment covers and avoid wording that accidentally admits a disputed balance.
What happens after the reply
Departmental review and adjudication
Keep monitoring the portal and the registered contact details for hearing notices, requests for documents and an order. A reply is not complete until the business can prove what was filed and when. Prepare a short internal chronology linking the notice, response, acknowledgement, hearing and later communications.
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If an order and DRC-07 appear
Read the order itself, not only the DRC-07 summary. Compare each finding with the corresponding reply paragraph and identify amounts confirmed, dropped or changed. Because the cited Rules describe DRC-07 as an order summary and treat the order as the notice for recovery, move promptly to the current review, rectification or appeal analysis. The precise procedure and deadline must be checked under the law in force for that case.
If the portal record is incomplete
Capture screenshots showing the reference number and status, keep download logs and raise a written technical issue through the channel identified by the portal or notice. Technical correspondence does not replace a substantive reply, so continue using the legally available filing route.
Situations requiring extra care
Financial year 2024–25 onward
Current section 74A treatment and implementation details were not established by the cited material. For periods from financial year 2024–25 onward, verify the enacted provision, notifications and current Rules before explaining liability, payment choices, limitation or deadlines. Do not copy an older section 73 or 74 workflow into a later period without that check.
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Fraud, wilful misstatement or suppression allegations
These allegations can change the statutory route, exposure and evidence needed. Preserve source data, board or management correspondence, system logs and adviser communications, and obtain specialist advice before making factual admissions. Do not describe a section 73 response as sufficient until the cited section has been confirmed.
Multiple registrations or periods
Keep a separate reconciliation and response index for each GSTIN, notice number and tax period. A payment, invoice or explanation attached to one registration should not be assumed to answer another registration’s proceeding.
Old records or missing staff
Document the search performed, identify the custodian of each record and request copies from banks, suppliers, customers or former service providers. Explain a genuine evidence gap and provide substitute proof where available; never recreate an invoice or ledger without marking it as a reconstruction.
Common mistakes that weaken a GST response
- Replying to the DRC-01 summary while ignoring the full SCN and annexures.
- Using a generic “all allegations are denied” paragraph without invoice-level or return-level evidence.
- Combining tax, interest and penalty into one figure that cannot be audited.
- Confusing the date printed on a document with the date it was served.
- Applying a deadline copied from another section, year or website.
- Uploading an unsigned reply or failing to preserve the acknowledgement and final file list.
- Paying before checking whether the payment is voluntary, required, reversible or treated as an admission under the applicable procedure.
- Continuing to use a 2022 Rules compilation without checking later amendments.
- Assuming an order summary is still an SCN and missing the separate recovery or appeal implications.
A reusable document checklist
- Complete SCN, DRC-01 summary, annexures and relied-upon documents.
- Email, portal, courier or other service evidence with timestamps.
- GSTIN, notice number, issuing authority, section, tax period and response instructions.
- Returns, invoices, credit and debit notes, ledgers, contracts, e-way bills and payment records relevant to each allegation.
- Input-tax-credit support, including purchase registers, supplier documents and relevant system reconciliation.
- Refund application, sanction and bank evidence where an erroneous-refund issue is alleged.
- Calculation workbook showing the department’s figures, corrections and disputed amounts.
- Point-by-point reply, attachment index and proof of filing.
- Chronology of hearings, follow-up requests, orders and any payment.
- Current-law check for the specific period, especially financial year 2024–25 onward and any fraud-related allegation.
Bottom line for a business that has just received the notice
Start with the complete show-cause notice, not the portal summary. Preserve service proof, map every allegation to the correct period and records, challenge arithmetic with a transparent reconciliation, and file the response through the route the notice and current portal instructions require. DRC-01 and DRC-06 describe an electronic summary-and-reply workflow in the cited Rules; DRC-07 signals the later order and recovery stage. Because the available Act page is not confirmed as a current consolidated text and the Rules compilation is dated 1 January 2022, verify the live law before relying on any deadline, payment consequence or section-specific remedy.
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