Understanding GST Notices: Frequent Triggers and Practical Ways to Respond

Since 2017, the landscape of indirect taxes in India has changed thanks to Goods and Services Tax regime and the growing digitalisation of the business environment has caused a surge in scrutiny of businesses. There is a greater incidence and intensity of notices issued by GST, Income Tax and Customs departments as a result of real-time reporting and exchanges of data between them.
 

Some of the common GST notices are:
 

● GSTR-3A (non-filing returns)

● GST DRC-01 (tax demand)

● GST ASMT-10 (scrutiny proceedings)

Every notice has its own deadlines and implications and non-response may result in fines, termination of registration or even criminal proceedings in terms of relevant provisions of the GST Act.

The key factors whose presence initiates GST notices are inaccurate GSTR-3B and GSTR-1 filings, overstated Input Tax Credit claims compared to those declared by suppliers and failure or untimely submission of required returns. Mismatches in the e-way bill, doubtful ITC claims, an excessive number of claims in refunds and turnover variations in relation to income tax returns also trigger departmental action.

Sections 73 and 74 Show Cause Notices require special focus. Section 74 includes the punishment of up to 100% of the amount of taxes in a case of fraudulent intent. Expert help is essential when dealing with complicated cases that may include departmental audits, anti-evasion processes or registration cancelling threats, which need to be addressed at the earliest with a strategic measure.

With advanced analytics driving compliance monitoring, GST notices should be viewed as opportunities for system improvement rather than obstacles. Proactive compliance management, defensible documentation and confident participation during proceedings ensure long-term business credibility and reduced litigation risks.

For expert GST compliance guidance, consult Prakash K Prakash.