Received a GST notice? What it means and what to do first

A GST notice arriving in your inbox tends to produce one of two reactions: panic, or the quiet hope that if you don’t open it, it might go away. Neither helps. Most notices are a request for an explanation, and most explanations come down to data you already have.

This is a practical guide to what the common notices mean, what usually causes them, and how to prepare. It is general information, not advice on your specific notice — for that, your chartered accountant is the right person.

The first hour: what to do

1. Read it properly. Identify the form number, the tax period, and exactly what the officer is asking.
2. Find the deadline. It is printed on the notice. Put it somewhere everyone involved can see.
3. Don’t reply in haste. A rushed reply that contradicts your own books is worse than a careful one.
4. Call your CA. The reply and any appearance before the officer are their job.
5. Pull the returns and books for the period in question, so the reconciliation can start.

The common notices and what they ask

Forms and procedures are amended from time to time, so treat this as orientation, not a legal reference. The notice itself is the authority on what is being asked.

Form	What it generally concerns
GSTR-3A	A reminder to a taxpayer who has not filed a return
DRC-01B	Automatic: the liability in your GSTR-1 exceeds the tax paid in GSTR-3B by more than ₹25 lakh and 20%. Pay or explain within seven days, or your next GSTR-1 is blocked
DRC-01C	Automatic: the input tax credit claimed in GSTR-3B exceeds what GSTR-2B made available beyond the threshold. Pay back with interest or explain within seven days
ASMT-10	Discrepancies found on scrutiny of returns; you are asked to explain
DRC-01A	Intimation of tax the officer considers payable, before a formal notice
DRC-01	Summary of a show cause notice proposing a tax demand
REG-03	Clarification sought on a registration application
REG-17	Show cause notice proposing cancellation of registration
ADT-01	Notice that the department intends to audit your records

The broad distinction worth understanding: some notices ask you to explain (scrutiny), while others propose a demand or action (show cause). The second kind is more serious, and more clearly a matter for professional representation.

What usually triggers them

In our experience the large majority trace back to a handful of data problems:

• GSTR-1 not matching GSTR-3B. Sales reported in one return differ from tax paid in the other.
• Input credit exceeding GSTR-2B. Credit claimed that suppliers never reported. Our GSTR-2B reconciliation guide covers this in depth.
• Late or missing returns. Which also carry their own cost — see the late fee calculator.
• Books not matching returns. Turnover in the financial statements differs from what the returns reported.
• Wrong tax head. CGST and SGST charged on what was an inter-state supply, or the reverse.

Almost none of these are fraud or wrongdoing. They are reconciliation gaps that nobody caught at the time.

Preparing the data a reply needs

A reply is only as strong as the reconciliation behind it. Before anyone drafts anything, assemble:

1. The returns for the period — GSTR-1, GSTR-3B and the GSTR-2B.
2. The books for the same period — sales and purchase registers, and the ledger.
3. A line-by-line reconciliation of whatever the notice questions — explaining each difference, not just the total.
4. Supporting documents — invoices, credit notes, and supplier confirmations where credit is in question.
5. A clear note of anything genuinely wrong — because some discrepancies will be real, and it is better to know which before the reply goes in.

Point five matters. A reply that insists everything is correct when part of it is not damages credibility on the parts that are right.

Who does what

OFS can	Your chartered accountant does
Reconcile returns against the books	Interpret the notice and the law
Reconcile input credit against GSTR-2B	Draft and file the reply
Assemble supporting schedules and documents	Appear before the officer
Identify which differences are genuine	Advise on any payment, appeal or dispute

That boundary is not a formality. OFS is not a firm of chartered accountants and does no CA-reserved work. Representation before the tax authorities stays with your CA — and a CA handed a clean reconciliation can write a far stronger reply, far faster, than one reconstructing the data under deadline.

Stopping the next one

Almost every notice we see was preventable by a monthly reconciliation done before the return was filed:

• GSTR-1 and GSTR-3B reconciled to each other and to the books every month
• GSTR-2B matched against the purchase register before claiming credit
• Vendor GSTINs validated at onboarding — our GSTIN validator catches malformed ones
• Due dates tracked ahead of time — the compliance calendar lists them

That monthly reconciliation is what our GST and TDS compliance service runs, with working papers delivered within 24 working hours of complete data. It will not make every notice impossible — but it makes most of them unnecessary, and makes the rest far easier for your CA to answer.