GST Notices, Adjudication & Appeals

What is GST notice handling and adjudication?

GST notices range from routine scrutiny queries about mismatches in returns to formal show-cause notices demanding tax, interest, and penalty. Adjudication is the process by which an officer decides a show-cause notice, after considering your reply and hearing you.

If you disagree with the order, you can appeal — first to the Appellate Authority, and then to the GST Appellate Tribunal. Each stage has strict time limits, and the quality of your reply at the first stage often decides the outcome.

The key terms

The notices and stages you're likely to see:

ASMT-10

A scrutiny notice pointing out discrepancies in your returns, asking for an explanation.

DRC-01A

An intimation before a show-cause notice, giving you a chance to pay or explain.

DRC-01 (show-cause notice)

The formal notice setting out the demand for tax, interest, and penalty, and the grounds.

Fraud and non-fraud cases

Longer time limits and higher penalties apply where fraud, wilful misstatement, or suppression is alleged. From FY 2024-25, a single provision covers both, with a common time limit.

DRC-07

The order confirming the demand, after considering your reply.

First appeal

Filed with the Appellate Authority in APL-01 within three months of the order, with a pre-deposit of a percentage of the disputed tax.

GST Appellate Tribunal

The second appeal, against the Appellate Authority's order, with a further pre-deposit.

Why a proper response matters

GST disputes are won or lost early:

Deadlines are short

Scrutiny notices and show-cause notices have tight reply deadlines. Missing them can lead to an order without your side considered.

The first reply shapes everything

Facts and documents not produced at the adjudication stage are harder to rely on later.

Penalties rise with delay

Paying at the right stage can reduce or eliminate penalties.

Pre-deposits for appeals

Appeals need a pre-deposit of part of the disputed tax, so avoiding an adverse order saves cash.

Recovery

Confirmed demands can be recovered from bank accounts and receivables if not paid or stayed.

Notices are data-driven

Most start from mismatches the system detects, so reconciliations are the best defence.

Time limits protect you too

Notices issued outside the time limits can be challenged.

Who is this for?

Departmental audits under Section 65 are covered by our GST Audit & Reconciliation service. Findings from an audit often lead to the notices described here.

The stages of a GST dispute

How a dispute usually progresses:

What we'll need from you

The notice

The full notice, with annexures and deadlines.

Returns

GSTR-1, GSTR-3B, GSTR-9, and 9C for the period.

Reconciliations

Books, returns, and GSTR-2B reconciliations.

Supporting documents

Invoices, contracts, e-way bills, and payment proofs.

Previous correspondence

Earlier notices and replies for the same period.

Portal access

GST portal access to view notices and file replies.

Fees depend on the stage, the issues, and the amount in dispute.

How we handle notices

Our approach to a notice:

1. 1

   Assess the notice

   We check the issues, time limits, and legal basis — including whether the notice is within time.

2. 2

   Reconcile

   Figures are reconciled with books, returns, and GSTR-2B.

3. 3

   Decide the strategy

   Pay what's genuinely due at the right stage, and contest the rest.

4. 4

   Draft the reply

   A detailed reply with legal grounds and evidence is prepared.

5. 5

   Personal hearing

   We represent you at the hearing.

6. 6

   Appeal if needed

   If the order is adverse, we file the appeal with the pre-deposit, within time.

After the order

What to do once an order is passed:

Check the order

Compare it with your reply and check the computation.

Rectification

Errors apparent on the record can be rectified by the officer.

Appeal in time

Diary the appeal deadline immediately.

Pre-deposit

Pay the pre-deposit; the remaining demand is generally stayed while the appeal is pending.

Watch recovery

Unpaid confirmed demands without an appeal can be recovered from bank accounts.

Fix the cause

Change processes that led to the dispute.

Benefits and responsibilities