A GST adjudication notice must identify the demand the proper officer proposes to establish and give the recipient a meaningful chance to answer it. It should specify the proposed amount and call for a response on why tax, interest and penalty should not be paid. The final order should remain within the notice’s grounds and amount. The electronic FORM GST DRC-01 is a summary served with the notice—not a substitute for the underlying notice and its supporting details.
This article concerns India’s central GST framework. Corresponding State and Union Territory GST provisions and notifications may also apply. The correct demand provision depends on the tax period: sections 73 and 74 cover periods up to FY 2023-24; for later periods, check section 74A and the applicable current law.
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What the notice must tell you
Sections 73 and 74 of the Central Goods and Services Tax Act, 2017 require the proper officer to specify the amount proposed and call on the person concerned to show cause why the specified tax, interest and penalty should not be paid. Section 73 is the route for cases outside the fraud-related category; section 74 concerns a demand by reason of fraud, wilful misstatement or suppression of facts to evade tax. See the [text of section 73] and [text of section 74].
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For the notice to serve that purpose, it needs to communicate the factual allegation and legal theory behind the proposed demand sufficiently for the recipient to understand and answer the case. A bare figure, without an intelligible explanation of what conduct or error is alleged and how it leads to that figure, may leave the recipient unable to respond meaningfully.
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Which legal route applies to the tax period?
| Provision | Period indicated by CBIC | Type of case |
|---|---|---|
| Section 73 | Periods up to FY 2023-24 | Demand cases other than the fraud-related category |
| Section 74 | Periods up to FY 2023-24 | Demand by reason of fraud, wilful misstatement or suppression of facts to evade tax |
| Section 74A | Later periods; confirm the applicable enactment | The later-period demand provision; consult the current consolidated central law and matching State/UT law before relying on it |
CBIC labels sections 73 and 74 as applying to periods up to FY 2023-24. The GST Council’s 53rd GST Council meeting materials document the introduction of section 74A. Because the applicable current text and commencement details can matter for a later-period case, do not assume the older sections’ procedure, deadlines or penalty treatment applies unchanged.
Checklist: how to read the notice
The statute’s express requirement is an amount-specific show-cause demand. The following checklist is a practical way to test whether the notice and accompanying material explain the case; it is not a claim that each item is a separately enumerated mandatory field in the text of sections 73 or 74.
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- Recipient and tax period: Check that the notice identifies the person and the period to which the proposed demand relates.
- Alleged default: Identify whether the allegation concerns short or non-payment of tax, an erroneous refund, an input tax credit issue, or another stated basis.
- Provision and theory: Note the cited section and whether the officer alleges fraud, wilful misstatement or suppression to evade tax. The asserted route can affect how the case must be answered.
- Amounts and calculation: Find the proposed tax, interest and penalty, and examine how the amounts are computed, including period-wise figures where relevant.
- Facts and supporting material: Check what records, transactions or other material the officer relies on, and whether the notice explains the connection between them and the proposed amounts.
- Reply and hearing process: Look for the response procedure and deadline stated for the proceeding, and consider whether a hearing can be requested or is otherwise applicable. Verify the actual procedural requirements for the relevant provision and period.
DRC-01 is a summary, not the whole notice
Rule 142 provides for an electronic FORM GST DRC-01 summary to be served along with the demand notice. Read the summary together with the complete notice and the material or particulars explaining the demand. A summary alone may not set out the full factual and legal case. Rule 142’s text is available from CBIC; GST Council also publishes instructions on DRC-01 and DRC-07 summaries.
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- Reply: The person’s representation or reply is furnished in FORM GST DRC-06 under Rule 142.
- Consideration: The proper officer must consider the representation before determining the demand.
- Order: Compare the final order with the notice. The order should not introduce different grounds or confirm amounts beyond those put in the notice.
- Order summary: FORM GST DRC-07 is the electronic summary of the order, specifying tax, interest and penalty payable. Under Rule 142(6), that summary is treated as the notice for recovery; it is not the same document as the adjudication order.
Compare the notice with the final order
When the order arrives, compare the two documents on the substance of the case rather than relying only on their summaries:
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- Does the order use the same legal provision and alleged conduct, including the same fraud or suppression theory if one was asserted?
- Do its factual grounds correspond to those set out in the notice and the material relied on?
- Are the tax, interest and penalty amounts within the proposed demand, and can their calculations be followed?
- Was the reply considered before the officer determined the demand?
If the order relies on a new ground or exceeds the notice’s proposed amount, preserve both documents and the reply when seeking advice on the available response or remedy. For a live demand, a GST practitioner, chartered accountant or tax lawyer can assess the facts, calculations and applicable procedural deadlines.
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