Last reviewed: 04 September 2026. If a GST notice has landed in your login — an ASMT-10 scrutiny query, a DRC-01A pre-notice intimation, or a full show-cause notice under Section 74A — the difference between a closed matter and a confirmed demand usually comes down to how the first two weeks are handled. This guide maps every notice type a GST-registered business is likely to see in 2026, the exact form and window to reply on, the documents to keep ready, and — because two Tribunal benches ruled on live notice disputes in the past four weeks — the appeal math as it stands today, including the Mumbai GSTAT bench and the newest case law.
- Which notice did you actually get
- Section 73 vs Section 74A, in brief
- Worked example: replying to an ITC-mismatch ASMT-10
- Worked example: pre-deposit math on a Section 74A demand
- The reply document checklist
- The appeal ladder, tier by tier
- Common mistakes that turn a query into a demand
- Further reading in this cluster
- Frequently asked questions
Which notice did you actually get
GST notices arrive under different sections for different reasons, and each carries its own clock. Match yours against the table before doing anything else.
| Notice / form | Legal basis | What it means | Typical reply window | If you do nothing |
|---|---|---|---|---|
| ASMT-10 (scrutiny) | Section 61 | Return-level discrepancy flagged by the officer — 2A/2B vs 3B mismatch, ratio checks, turnover gaps | 15–30 days, as stated in the notice; reply in Form ASMT-11 | Escalates straight to a show-cause notice |
| DRC-01A | Rule 142(1A) | "Pre-notice" intimation of the tax the officer proposes to demand — a chance to pay or explain before a formal SCN | Usually 7–15 days, as stated | Formal DRC-01 show-cause notice is issued |
| DRC-01 / SCN | Section 73 / 74 / 74A | Formal show-cause notice for tax short-paid, ITC wrongly availed, or refund wrongly claimed | Minimum 30 days before the order can be passed | Ex-parte order under DRC-07 |
| DRC-07 | Sec 73(9)/74(9)/74A | Summary of the demand order — tax, interest, penalty confirmed | 3 months to file first appeal (APL-01) | Recovery proceedings under Section 79 begin |
| DRC-13 / DRC-16 | Section 79 | Recovery notice to a third party (bank, debtor) or attachment of property | Immediate — funds can be attached on receipt | Bank account or receivables frozen |
| RFD-03 | Rule 90(3) | Deficiency memo on a refund application | Typically 15 days to refile with corrections | Refund claim treated as never filed |
| REG-17 / REG-31 | Sec 29 / Rule 21A | Show-cause for registration suspension or cancellation | 7 days — reply in Form REG-18 | GSTIN stays suspended; e-way bills and e-invoices get blocked |
Section 73 vs Section 74A, in brief
For FY 2024-25 onward, the earlier Section 73 (non-fraud) and Section 74 (fraud/suppression) framework has been unified into Section 74A, with two internal limbs rather than two separate sections. Demands relating to FY 2023-24 and earlier still run under the old Section 73/74 numbering.
| Track | Applies to | Penalty if paid before SCN / within 30 days of SCN |
|---|---|---|
| Non-fraud limb | Section 73 demands (up to FY 2023-24) and the Section 74A non-fraud limb (FY 2024-25 onward) | No penalty before SCN; 10% of tax or ₹10,000, whichever is higher, if paid within 30 days of the SCN |
| Fraud / suppression limb | Section 74 demands (up to FY 2023-24) and the Section 74A fraud limb (FY 2024-25 onward) | A graded penalty scale that rises with how late payment happens — see the full breakdown below |
The exact graded penalty percentages, the limitation timeline, and a full GSTAT walkthrough are covered in our dedicated guide: GST Demand Notices & Section 74A: The Complete Appeal Guide. This section only needs to tell you which track you are on before you read the notice tables above.
Worked example: replying to an ITC-mismatch ASMT-10
Facts (illustrative): a Thane-based auto-components MSME receives an ASMT-10 in August 2026 flagging a ₹4.2 lakh gap between ITC claimed in GSTR-3B and ITC reflected in GSTR-2B for FY 2025-26, with a 20-day reply window.
- Reconcile first, explain second. Pull a month-wise 2B-vs-3B working for the whole year, not just the flagged months — officers often widen scrutiny once a reply is filed.
- Bucket the gap by cause. In this case: a genuine timing difference where two vendors filed their GSTR-1 late (₹2.6 lakh), invoices simply not uploaded by one vendor despite payment (₹1.1 lakh), and one duplicate claim by the business itself (₹0.5 lakh).
- File ASMT-11 within the window with the invoice-wise reconciliation, ledger extracts, and copies of the vendor follow-up emails as annexures — a bare covering letter without working papers is the single most common reason a scrutiny reply gets rejected.
- Reverse the genuine error voluntarily via Form DRC-03 with interest on the ₹0.5 lakh duplicate claim before filing the reply — this keeps the matter within scrutiny rather than inviting a formal SCN over a point you cannot contest anyway.
Worth knowing: a September 2026 GSTAT Bengaluru ruling held that a bare GSTR-3B vs GSTR-2A/2B mismatch cannot, by itself, justify denying ITC without invoice-wise reconciliation, and that a personal hearing under Section 75(4) is mandatory even if the taxpayer did not request one. That strengthens the taxpayer's hand if a genuine timing-difference case is still pushed to an SCN — but it is a Tribunal ruling, not a fresh CBIC instruction, so it does not change what you file at the ASMT-11 stage.
Worked example: pre-deposit math on a Section 74A demand
Facts (illustrative): a show-cause notice under Section 74A (non-fraud limb, an ITC-classification dispute) raises a demand of ₹18,00,000 tax for FY 2025-26, confirmed in full by DRC-07 after the business's reply is rejected.
| Stage | Forum / form | Pre-deposit | Running total |
|---|---|---|---|
| 1 | Commissioner (Appeals) — Form APL-01, within 3 months of the order | 10% of ₹18,00,000 = ₹1,80,000 | ₹1,80,000 |
| 2 | GSTAT — Form APL-05, within 3 months of the appellate order | A further 10% = ₹1,80,000 | ₹3,60,000 (≈20% of the demand) |
Both amounts sit well under the ₹25 crore cap that applies separately to CGST and SGST, so the cap is irrelevant here — it only bites on very large disputes. The remaining recovery stays stayed automatically under Section 112(9) once the GSTAT pre-deposit is paid and the appeal is on file.
Recent development to watch: where the order also carries a penalty and the SCN was issued on or after 1 April 2025, some officers have additionally demanded 10% of the disputed penalty as pre-deposit at the GSTAT stage. GSTAT's Hyderabad bench held in August 2026 that this penalty pre-deposit add-on (introduced by the Finance Act, 2025) applies prospectively only — not to proceedings that were already pending when the provision came into force. Treat this as a live, appealable position rather than settled law, and get it checked against your own SCN date before relying on it.
Also worth noting: GSTAT's Mumbai bench began hearing matters from 27 July 2026, and the one-time transitional filing deadline of 30 June 2026 — for appeals arising out of orders passed before 1 April 2026 — has now passed. If an old order of yours fell in that window and the appeal was not filed, take advice on condonation options rather than assuming the door is closed.
The reply document checklist
Keep this ready before you draft a reply to any notice in the table above — the specific annexures change, the base file rarely does.
- GSTR-1, GSTR-3B and GSTR-2B/2A for the period in question — both PDF and the underlying Excel/CSV
- Purchase register and sales register, reconciled line-by-line to the returns filed
- E-way bills and delivery challans for any specifically disputed transactions
- Bank statements covering the period, to counter a turnover-mismatch or unexplained-credit allegation
- Stock/inventory register where the notice concerns valuation, stock variance, or e-way bill discrepancies
- Copies of any prior correspondence with the department on the same issue, including earlier ASMT-10/DRC-01A replies
- A signed authorisation letter or Power of Attorney if a CA or consultant is filing the reply on the business's behalf
- Challan copies and working papers for any tax already paid voluntarily via DRC-03
The appeal ladder, tier by tier
| Stage | Forum | Form | Filing window | Pre-deposit |
|---|---|---|---|---|
| 1 | Commissioner (Appeals) | APL-01 | 3 months from the order (further 1 month condonable on sufficient cause) | 10% of disputed tax, capped ₹25 crore each under CGST/SGST |
| 2 | GST Appellate Tribunal (GSTAT) | APL-05 | 3 months from the appellate order | A further 10% (cumulative ≈20%) |
| 3 | High Court | Writ / Section 117 appeal | As per limitation — substantial question of law only | No statutory slab; stay at the court's discretion |
| 4 | Supreme Court | Section 118 / SLP | As per limitation | At the court's discretion |
For a Maharashtra-registered business, Stage 2 is no longer theoretical: the GSTAT Mumbai bench has been hearing matters since 27 July 2026, alongside roughly 31 state bench locations rolling out nationally through the year. In practice, this changes the calculus at the first-appeal stage too — a Commissioner (Appeals) order that once sat unchallenged because GSTAT "wasn't functioning yet" is no longer a dead end, and businesses sitting on an adverse first-appeal order from earlier in 2026 should re-check their own limitation dates rather than assume the window has closed. Many first-appeal orders from January–March 2026 still fall within the 3-month (plus condonable 1-month) window when measured from actual communication, not from the order date on paper — the two are not always the same, and the gap has revived more than one appeal that looked time-barred at first glance.
Common mistakes that turn a query into a demand
- Treating the reply deadline as flexible — officers rarely grant informal extensions; ask in writing before the deadline, not after it has passed.
- Replying with only a covering letter and no reconciliation annexed — the working papers are the reply; the letter is just a summary of them.
- Paying tax "under protest" without formally filing it through DRC-03, leaving no traceable credit for it at the appeal stage.
- Ignoring a DRC-01A because it "isn't a real notice yet" — it is the least costly stage in the entire ladder to close a genuine gap.
- Missing that a suspended GSTIN blocks e-way bill generation and invoicing from the date of the suspension order, not from any later final decision.
- Letting the first-appeal window lapse on the assumption that a favourable order will simply follow — the condonable extension is only one month and needs sufficient cause on record.
Further reading in this cluster
- GST Demand Notices & Section 74A: The Complete Appeal Guide — full penalty ladder and GSTAT walkthrough
- ASMT-10 Scrutiny Notice: 15-Day Reply Checklist
- Blocked ITC under Section 17(5): The Full List and Exceptions
- GST IMS & GSTR-3B ITC Hard-Locking: What Changed From July 2026
- E-Way Bill Limits 2026: State-Wise Rules, Validity and Penalty
- GST Refund Rejected? Deficiency Memo (RFD-03) Fixes
- GST Registration Suspended or Cancelled Suo Motu: Revival Steps
- GSTR-9/9C Annual Return: Thresholds and Filing Guide
- GST Registration Online: The Complete 2026 Guide
Frequently asked questions
I received an ASMT-10 — is this the same as a show-cause notice?
No. ASMT-10 under Section 61 is a scrutiny query about return-level discrepancies — reply in Form ASMT-11 within the window the notice states, usually 15 to 30 days. Only if your explanation is rejected does it escalate to a formal show-cause notice; a well-reconciled ASMT-11 reply commonly closes the matter with an ASMT-12.
What is a DRC-01A and do I have to reply to it?
DRC-01A is a pre-notice intimation under Rule 142(1A) — the officer's proposed demand before a formal show-cause notice is issued. You are not legally compelled to reply, but ignoring it almost always converts it into a DRC-01 show-cause notice. Replying, or paying the admitted portion via DRC-03, at this stage is usually the least expensive way to resolve a genuine gap.
What happens if I miss the reply deadline on a show-cause notice?
The officer can pass an ex-parte order under DRC-07 based on the notice alone, without hearing your side. You can still appeal that order to the Commissioner (Appeals) within 3 months, but you lose the chance to influence the original finding — always ask for a short extension in writing before the deadline if you genuinely need more time.
How much do I have to pay before filing a GST appeal?
10% of the disputed tax amount at the first appeal stage (Commissioner-Appeals), capped at ₹25 crore each under CGST and SGST, and a further 10% if you go on to the GST Appellate Tribunal — roughly 20% cumulative across both tiers. The remaining recovery stays stayed automatically while the appeal is pending.
Is the GST Appellate Tribunal (GSTAT) actually functioning now?
Yes. GSTAT has been operational nationally since 16 February 2026 (Principal Bench, Delhi, and the Cuttack bench first), with state benches rolling out through the year. The Mumbai bench began hearing matters from 27 July 2026, so for a Maharashtra-based business, filing at GSTAT is now a live, working option rather than a wait-and-watch one.
My GST registration was suspended after a notice — what can I do immediately?
A suspension under Rule 21A blocks e-way bill generation and return filing from the date of the suspension order, not from any later final decision. Reply to the REG-17/REG-31 show-cause notice within 7 days on Form REG-18 — see our dedicated guide on reviving a suspended or cancelled GSTIN for the exact steps.
Does a GSTR-2B vs GSTR-3B mismatch automatically mean I lose the ITC?
Not automatically. A September 2026 GSTAT Bengaluru ruling reinforces this: a bare mismatch between GSTR-3B and GSTR-2A/2B cannot justify denying input tax credit without invoice-wise reconciliation, and the officer must grant a personal hearing under Section 75(4) even if you did not ask for one. Still, always reconcile and explain the gap proactively rather than relying on this position alone — it can be appealed further.
Can I reply to a GST notice myself, or do I need a CA?
You can reply yourself, and for a straightforward ASMT-10 many businesses do. But once a matter moves past scrutiny into a formal show-cause notice, the reply needs to combine the correct legal ground (which section, which limitation period applies) with a clean numerical reconciliation and the right annexures — that combination, plus the pre-deposit and appeal stakes involved, is why most businesses bring in a CA from the DRC-01A or SCN stage onward.
We handle everything from an ASMT-10 reconciliation reply to a full GSTAT appeal filing — send us the notice and we'll tell you, plainly, what it means and what it will take to close it.
GST Notice Handling & Reply ASMT-10 Reply Assistance Talk to usThis guide reflects the GST notice and appeal framework, GSTAT bench status and pre-deposit rules as understood on 04 September 2026, based on the CGST Act, associated rules, and Tribunal rulings publicly reported as of that date. GSTAT case law (including the Hyderabad and Bengaluru rulings referenced above) is recent and can be revised in further appeal; verify the current position, and your notice's specific facts, before deciding how to respond. This is general information, not legal or tax advice for your specific matter.