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A GST notice is not automatically a demand for immediate payment. Its form number, statutory section, tax period, allegations and procedural stage determine what you must do next. In broad terms, ASMT-10 is a return-scrutiny discrepancy notice, ADT-01 starts an audit, DRC-01 is the electronic summary of certain show-cause demand notices, and DRC-07 records an order that can become the basis for recovery. Read the served document and its deadline rather than relying on the subject line alone.
The categories below explain the usual route under the Central GST framework. Exact deadlines, penalties, appeal rights and recoverability depend on the notice or order, the applicable version of the law and the facts of the case.
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At a glance: which GST document are you holding?
| Category | Procedural stage | Common form | What it means | Usual next route |
|---|---|---|---|---|
| Scrutiny | Review of a filed return | ASMT-10; reply ASMT-11; closure ASMT-12 | The proper officer has identified a discrepancy in a return or related information. | Explain, accept and pay where appropriate, or face further determination proceedings if unresolved. |
| Audit | Examination of records for a financial year or multiple years | ADT-01; findings ADT-02 | Officers examine books, returns and tax positions in depth. | Provide records and explanations; findings may lead to separate proceedings. |
| Demand/show cause | Proposed determination of liability | DRC-01 summary; reply DRC-06 | The department alleges unpaid or short-paid tax, an erroneous refund or wrongly availed/utilised input tax credit (ITC), and asks why tax, interest and applicable penalty should not be paid. | Answer the allegations under the stated section within the served deadline. |
| Order and recovery | Liability determined and collection pursued | DRC-07 order summary | An order has been made; the DRC-07 summary is treated under the rules as the notice for recovery. | Check payment, ledger, appeal and recovery status immediately. |
These four labels do not cover every GST proceeding. A document may also involve registration, refunds, investigations or other statutory processes, so the form and section on the actual communication control.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallWhat is a GST scrutiny notice (ASMT-10)?
Scrutiny is a review of information already reported in a return against information available to the proper officer. It is intended to identify and communicate discrepancies; it is not, by itself, a final adjudicated demand.
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How the scrutiny sequence works
- ASMT-10: the officer specifies the discrepancy and asks for an explanation or corrective action. CBIC scrutiny guidance says discrepancies should, as far as possible, be specific and quantified.
- ASMT-11: you either explain why the return is correct or accept the discrepancy and take the appropriate corrective or payment step.
- ASMT-12: where the explanation or information is accepted, the officer communicates that outcome.
The current CBIC assessment and audit rules page states that the time specified in an ASMT-10 reply cannot exceed 15 days from service. A 2022 scrutiny instruction discussed a 30-day period under the rule version it referenced. Because those official materials reflect different wording, use the deadline printed in your served notice and verify the consolidated rule and any amendment in force for the relevant period.
What to assemble before replying
- The return and annexures for the tax period named in ASMT-10.
- Sales and purchase registers, invoices, e-way or other transaction records relevant to the discrepancy.
- Electronic liability, cash and credit ledgers, plus any voluntary payment already made.
- A reconciliation showing the exact figures, tax heads and periods, with a separate explanation for each issue.
An unresolved or unpaid discrepancy can move toward tax determination under section 73 or section 74. That later proceeding is distinct from the initial scrutiny communication.
What is a GST audit notice (ADT-01)?
An audit is a broader records examination under section 65. It can cover one financial year or multiple financial years. ADT-01 starts the audit; it is not a demand order.
What officers may examine
The audit can review books of account, returns, turnover, exemptions, deductions, tax rates, ITC, refunds and any other relevant issue. The scope is wider than checking one return mismatch, so prepare a consistent explanation across accounting records, GST returns and supporting contracts or correspondence.
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How the audit concludes
After considering your reply and the material examined, the findings are communicated in ADT-02. An adverse audit finding may lead to another statutory process, including a demand notice, but the ADT-02 or ADT-01 should not be described as the demand itself.
Practical audit preparation
- Identify the financial year or years and every record category requested in ADT-01.
- Build a year-wise reconciliation of books to returns, including turnover, exempt and non-taxable supplies, tax rates, ITC and refunds.
- Index invoices, ledgers, agreements, calculation workpapers and prior departmental correspondence so each answer can be traced to evidence.
- Keep a dated log of questions, submissions, meetings and documents delivered.
- Review the draft or communicated findings promptly and respond to factual errors with supporting schedules.
What is a GST demand notice (DRC-01)?
A demand notice is a show-cause process about alleged liability. Sections 73 and 74 of the Central Goods and Services Tax Act address unpaid or short-paid tax, erroneous refunds and wrongly availed or utilised ITC. Section 74 applies where the specified matter is alleged to have arisen by reason of fraud, wilful misstatement or suppression of facts to evade tax; section 73 is the route for cases not involving those specified elements.
The notice asks why the stated tax, interest and applicable penalty should not be paid. The exact allegation, period, calculation and statutory basis must be read from the document; do not infer the section merely from the amount or from a portal label.
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DRC-01 and DRC-06
For notices covered by the relevant rules, DRC-01 is the electronic summary uploaded with the notice. The prescribed electronic reply is DRC-06. The summary does not replace the detailed notice: compare both for the tax period, tax heads, interest, penalty, grounds and calculation.
How to answer a proposed demand
- Record the section invoked, the notice number, date and mode of service, tax period, GSTIN, issuing authority and every proposed amount.
- Separate factual disputes (for example, a duplicate invoice or wrong period) from legal disputes (for example, classification, exemption or ITC eligibility).
- Prepare a point-by-point reply with a reconciliation and documentary evidence. Preserve the original records and an exact copy of the submission.
- File DRC-06 through the prescribed portal route within the deadline in the notice and retain the acknowledgement.
- If the notice proposes section 74 consequences, obtain professional advice quickly because the fraud, wilful-misstatement or suppression allegation can materially affect exposure and strategy.
Payment, an admission or a partial response may have consequences that differ by statutory route. Do not assume that paying an amount automatically closes every issue or removes every possible penalty.
What happens after a DRC-07 order?
After adjudication, the department may upload a summary of the specified order in DRC-07. Under the demand and recovery rules, that order summary is treated as the notice for recovery. This is a different stage from DRC-01, which accompanies a proposed demand.
Immediate checks
- Compare the order and DRC-07 figures with the original notice, your reply and any hearing record.
- Check the electronic liability ledger and whether tax, interest or penalty has already been paid or adjusted.
- Note the order date, service date and the appeal deadline applicable to that order.
- Check whether recovery action is shown on the portal and whether an appeal has been filed or admitted.
The GST Portal’s appeal FAQ states that a minimum pre-deposit of 10% of disputed tax is required for filing an appeal and that, once an appeal is admitted, the balance disputed amount is flagged as non-recoverable. This is the FAQ’s stated portal guidance; confirm the current law, order type, filing details and any additional conditions before relying on it.
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Amounts not in dispute, and amounts or components outside the protection described in the applicable appeal rules, may remain payable. An appeal does not mean that every part of an order is automatically stayed.
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How to identify the procedural stage in minutes
- Find the form number. ASMT-10 points to scrutiny; ADT-01 to audit; DRC-01 to a show-cause demand summary; DRC-07 to an order summary used for recovery.
- Read the statutory section. Look for section 65 for audit, section 73 or 74 for demand determination, and any recovery or appeal provisions cited in an order.
- Locate the operative language. “Explain the discrepancy” signals review; “show cause why” signals a proposed demand; an amount “determined” or a recovery direction signals an order stage.
- Write down service details. Record the date, portal or other mode of service, reply deadline, hearing date and the officer’s contact or designation.
- Match the amount to the stage. A figure in ASMT-10 or DRC-01 is not necessarily a final recoverable liability. A DRC-07 amount reflects an order, subject to applicable payment and appeal rules.
Response checklist for any GST notice
- Download the full notice, annexures and portal acknowledgements; do not rely on an email alert alone.
- Verify GSTIN, legal name, tax period, form, section, issuing authority and document number.
- Build a deadline calendar using the actual service date and the wording of the notice.
- Preserve books, invoices, contracts, return data, ledgers, reconciliations and prior correspondence in an unaltered evidence folder.
- Quantify each disputed item and distinguish tax, interest, penalty and late-fee components.
- Use the form and portal route specified for that stage, and retain the filing reference, digital signature or electronic verification record.
- Escalate to a qualified GST adviser when the amount is material, records are incomplete, fraud or suppression is alleged, limitation is disputed, or an order has already been passed.
Deadlines, amendments and the document that controls
There is no single universal GST-notice deadline. The served notice, the statutory provision it invokes and the law applicable to the relevant period control. For ASMT-10, the live CBIC rules page currently says the specified reply time cannot exceed 15 days from service, while Instruction No. 02/2022-GST discussed 30 days under the version it referenced. The safest practice is to calendar the date shown on the notice and verify the current consolidated text before filing.
The consolidated CGST Rules compilation dated 1 January 2022 is useful for understanding the DRC-01, DRC-06 and DRC-07 relationships, but it may not contain later amendments. For the Act’s statutory language, consult the Central Goods and Services Tax Act. Payment and ledger mechanics are addressed in the CBIC payment rules. Always check the latest official text and the exact notice served on you.
Common mistakes that make a notice harder to resolve
Treating every notice as a final demand
ASMT-10 and ADT-01 are review and examination documents. DRC-01 accompanies a proposed demand. DRC-07 records an order used for recovery. Confusing these stages can lead to either premature payment or a missed response.
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An informal email or phone explanation may not satisfy the prescribed electronic response. Use ASMT-11, DRC-06 or the route specified for the audit and retain proof of submission.
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Sending a narrative without a reconciliation
For quantified discrepancies, a schedule that ties each figure to returns, invoices and ledgers is more useful than a general assertion that the tax was correctly reported.
Ignoring service and appeal dates
Portal upload, email and other permitted service modes can affect when time starts running. Record the actual service evidence and seek advice immediately if a deadline has passed; do not assume that silence, a payment or a late reply cures the procedural position.
Bottom line for a GST registrant
Start with the document, not its label: identify the form, section, period, grounds, amount and service date. Respond at the correct stage—ASMT-11 for scrutiny, records and explanations for ADT-01, DRC-06 for a covered demand notice, and an appeal or payment decision after DRC-07. Verify every deadline and recovery consequence against the served document and current official law, especially where the amount is significant or section 74 allegations are involved.
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