What is a GST Notice: Types, Time Limit and How to Reply?

GST notices are official communications from tax authorities to taxpayers regarding potential compliance issues or the need for additional information. They are sent when suspicious activities or non-compliance with GST rules are detected.

Common reasons for receiving such notices include unsuccessful GST registration, late or incomplete GST refunds, excessive input tax credit claims, unpaid GST or underpayment of GST. These notices may be referred to as inspection notices, show-cause notices (SCNs) or demand notices, depending on their purpose and severity.

Taxpayers must respond to these notices immediately within the stipulated time frame to avoid legal consequences including penalties and prosecution by the GST authorities.

Some common reasons when GST notices are sent include the following

• If a taxpayer intentionally or unintentionally fails to pay GST correctly, resulting in an underpayment
• Discrepancies found in the information provided between GSTR 1 and GSTR 3B
• Due to long delays in filing GSTR 1 followed by GSTR 3B, which exceeds a period of six months
• Audit notices can be generated when tax authorities need to audit a taxpayer's financial records
• Difference in Input Tax Credit (ITC) claimed in GSTR 3B as compared to the data available in GSTR 2A
• Inconsistent declarations made in the e-way bill portal and GSTR 1
• Improper utilization of Input Tax Credit (ITC)
• Failure to submit the required information to the GST authorities within the specified time frame
• If a business required to register under GST remains unregistered and fails to comply with tax and other
obligations under the GST Act

Response time limit and validity of GST notices will vary depending on their types. The following table lays down the details of various types of GST notices:

Under Section 169 of the CGST Act, specific modes of delivery of GST notice have been laid out and any alternative modes of delivery of such notices will not be considered valid under the GST legislation. Prescribed methods via which you can receive a GST notice include:

• Hand delivery to taxpayers or their representative
• Sending notices by courier, registered mail or express mail carrying confirmation to the latest place of the taxpayer’s business.
• Sending notifications by e-mail to the taxpayer's registered email ID.
• Declaration of notification on the GST portal (for this taxpayer needs access their GST account after logging into GST portal.
• Publication in regional newspapers and distribution in the taxpayer's locality based on the last known address of the taxpayer's business or residence
• Putting up a notice in a visible location at the last known address of the taxpayer's residence or business

Taxpayers can respond to GST notices online using their digital or electronic signatures. They must pay any tax or interest that is outstanding under the GST Act and submit the required form to the issuing authority after making such a GST payment. You also need to adhere to the time limit for filing clarification.

In case of not replying to a GST notice within the stipulated time limit, they will be held liable for penalties and further proceedings as per the rules set up in the GST Act, 2017.

Taxpayers can authorise a representative or a chartered accountant to handle GST notification matters through an authorisation letter. Failure to respond to GST notifications within the stipulated time may result in penalties and further proceedings under the GST Act.