GST Show Cause Notice Reply Format 2026
REPLY TO SHOW CAUSE NOTICE
[Annexure to FORM GST DRC-06 — reply furnished under Rule 142(4) of the CGST Rules, 2017]
Before {{officer_designation}}
Noticee: {{client_name}}
GSTIN: {{client_gstin}}
Address: {{client_address}}
Show cause notice: {{notice_ref}} dated {{notice_date}}, issued under section {{scn_section}} of the Central Goods and Services Tax Act, 2017 (summary in FORM GST DRC-01)
Period covered: {{tax_period}}
Demand proposed: tax of ₹ {{demand_tax}}, with interest under section 50 and penalty
The noticee submits this reply to the above show cause notice. Each submission is made without prejudice to the others, and nothing stated in the notice is admitted unless it is specifically admitted in this reply.
PART I — BRIEF FACTS
1. The noticee is ____________ [constitution and nature of business in one or two sentences — e.g. 'a private limited company engaged in the wholesale trading of electrical goods'], registered under GSTIN {{client_gstin}}, and has furnished its returns under section 39 and its annual return under section 44 for the period covered by the notice.
2. The chronology of the proceedings is as follows:
| Date | Event | Reference |
|---|
| ____________ | Scrutiny notice in FORM GST ASMT-10 / audit observation / inspection [strike out what does not apply] | ____________ |
| ____________ | Reply furnished by the noticee (ASMT-11 / reply to audit memo) | ARN ____________ |
| ____________ | Intimation in Part A of FORM GST DRC-01A, if any, and Part B response | ____________ |
| {{notice_date}} | Show cause notice issued; summary uploaded in FORM GST DRC-01 | {{notice_ref}} |
| ____________ | Date fixed for reply / personal hearing in the notice | ____________ |
PART II — SUMMARY OF THE DEMAND AND THE NOTICEE'S POSITION
| Issue | Allegation in the notice (in brief) | Tax proposed (₹) | Position of the noticee | Reply at para |
|---|
| 1 | ____________ [e.g. liability in GSTR-1 exceeds GSTR-3B] | ____________ | Contested in full / in part / admitted and paid | Part IV, Issue 1 |
| 2 | ____________ [e.g. ITC in GSTR-3B exceeds GSTR-2A / 2B] | ____________ | ____________ | Part IV, Issue 2 |
| 3 | ____________ [e.g. ITC blocked under section 17(5) / reverse charge not paid] | ____________ | ____________ | Part IV, Issue 3 |
| Total | {{demand_tax}} | | |
PART III — PRELIMINARY OBJECTIONS
[Keep only the objections that the record supports and delete the rest. A preliminary objection that is not borne out weakens the reply on merits.]
A. The notice is barred by limitation. ____________ [state the financial year, the due date of the annual return for that year as extended, and the date of the notice. For periods up to FY 2023-24: under section 73 the order must issue within three years of that due date (section 73(10)) and the notice at least three months before that limit (section 73(2)); under section 74 the order must issue within five years (section 74(10)) and the notice at least six months before (section 74(2)). For FY 2024-25 onwards: the notice must issue within forty-two months of that due date (section 74A(2)). Show the arithmetic.]
B. The notice invokes the wrong provision for the period. Sections 73 and 74 apply only to tax pertaining to the period up to Financial Year 2023-24 (sub-section (12) of each), and section 74A applies to tax pertaining to Financial Year 2024-25 onwards (section 74A(12)). ____________ [use only where the section cited does not match the period — e.g. a single notice under section 74 covering FY 2023-24 and FY 2024-25].
C. The ingredients of fraud, wilful misstatement or suppression are not made out. The notice alleges ____________ but does not identify any fact that the noticee was required to declare and did not declare. Every transaction relied upon in the notice is taken from the returns, statements and books furnished by the noticee itself. "Suppression" is defined as non-declaration of facts or information which a taxable person is required to declare in a return, statement, report or other document, or failure to furnish information asked for in writing; a difference between two returns filed by the noticee is not suppression. The proposal to invoke section 74 [or, for FY 2024-25 onwards, the penalty under section 74A(5)(ii)] is therefore unsustainable, and the matter, if at all, falls to be determined as a case not involving fraud — see section 75(2) and section 75(2A).
D. The notice is vague and does not disclose the basis of the demand. ____________ [state what is missing — the working of the amount, the invoices or suppliers relied on, the documents referred to but not supplied]. Rule 142(1) requires a notice to be served, with a summary in FORM GST DRC-01 alongside it; a summary by itself, without the reasoned notice and the documents relied upon, does not enable an effective reply. The noticee requests copies of ____________ and reserves the right to file a further reply on receiving them.
E. Proceedings on the same subject matter are already pending / concluded. ____________ [where the State or Central authority has already initiated proceedings on the same issue and period, cite the reference and rely on section 6(2)(b); where the same issue was dropped in FORM GST ASMT-12 or concluded in an earlier order, cite that order].
F. The notice goes beyond the pre-notice intimation / scrutiny notice. ____________ [use where the SCN raises heads or amounts that were never put to the noticee earlier and on which no explanation was called for; ask that these heads be dropped or that full particulars and adequate time be given].
PART IV — ISSUE-WISE REPLY ON MERITS
Issue 1 — ____________ [title of the issue as framed in the notice]
1.1 Allegation: ____________ [reproduce the allegation and the amount in two or three lines, citing the paragraph of the notice].
1.2 Facts: ____________ [state what actually happened, with figures — e.g. 'invoices of ₹ ____ pertaining to March were reported in GSTR-1 of March but the tax was paid in GSTR-3B of April; the tax and interest are traceable to the April return, ARN ____'].
1.3 Submissions: ____________ [the legal position — section, rule, notification or circular relied upon — applied to the facts. One point per sub-paragraph.]
1.4 Evidence: Annexure ___ — ____________ [reconciliation statement, ledger extract, invoices, returns].
1.5 Conclusion: The demand of ₹ ____________ under this issue is not sustainable and is liable to be dropped [or: is sustainable only to the extent of ₹ ____________, which has been paid — see Part VII].
Issue 2 — ____________
2.1 Allegation: ____________
2.2 Facts: ____________
2.3 Submissions: ____________
2.4 Evidence: Annexure ___ — ____________
2.5 Conclusion: ____________
[Repeat the five-part block for every issue in the notice. The table below lists the lines of reply and the evidence that usually carry the common heads of demand.]
| Head of demand | Usual lines of reply | Evidence to annex |
|---|
| Outward liability: GSTR-1 above GSTR-3B | Timing difference paid in a later GSTR-3B; amendments and credit notes; advances adjusted; duplicate or erroneous reporting corrected in a later GSTR-1; liability finally reconciled in GSTR-9 | Month-wise GSTR-1 vs GSTR-3B reconciliation; later-period returns; GSTR-9 Tables 4, 9, 10 and 11 |
| ITC: GSTR-3B above GSTR-2A / 2B | Invoice-level matching; IGST paid on imports and SEZ supplies; credit of an earlier period taken within the section 16(4) time limit; reversals re-claimed; supplier filed late and the invoice appears in a later statement | Purchase register matched to GSTR-2A / 2B; bills of entry; tax invoices; proof of payment to suppliers |
| ITC denied because the supplier did not pay tax or is cancelled | Supply actually received; tax invoice held; payment through banking channels; supplier was registered on the date of supply; movement of goods evidenced | Invoices; e-way bills; goods receipt notes; bank statements; supplier registration status on the date of supply |
| Reverse charge not paid | Service not covered by the reverse charge notification; supplier charged tax under forward charge; liability paid in a later period; credit of the tax is available in the same period | Contract; supplier invoices; ledger; DRC-03 or later GSTR-3B |
| Blocked credit / exempt-supply reversal | Credit not covered by section 17(5) on a correct reading; reversal already made in GSTR-3B Table 4(B) or in GSTR-9; Rule 42 / 43 working re-computed | ITC register; reversal working; GSTR-3B and GSTR-9 extracts |
| Turnover difference with books / GSTR-9C / e-way bills | Non-GST and exempt items; stock transfers; cancelled e-way bills; items in books that are not supplies (interest, grants, unbilled revenue timing) | Books-to-returns reconciliation; GSTR-9C Table 5; e-way bill report |
PART V — WITHOUT PREJUDICE: QUANTUM OF THE DEMAND
5.1 Without prejudice to the submissions above, the amount proposed is overstated for the following reasons: ____________ [arithmetical errors; the same amount demanded twice under two heads; tax already paid through GSTR-3B or FORM GST DRC-03 not given credit; credit notes ignored].
5.2 Where the consideration received is to be treated as taxable, it is inclusive of tax, and the tax must be worked back in the manner laid down in Rule 35 — tax = (value inclusive of tax × rate) ÷ (100 + rate). On that basis the demand under Issue ___ reduces to ₹ ____________.
5.3 Where any outward liability is confirmed, the noticee is entitled to the input tax credit attributable to those supplies, and the demand should be restricted to the net amount of ₹ ____________ [use only where the facts and the section 16(4) time limit support it].
PART VI — INTEREST AND PENALTY
6.1 Interest. Since the tax itself is not payable, no interest arises. Without prejudice, in respect of input tax credit, interest under section 50(3) is payable only where the credit has been both wrongly availed and utilised; the electronic credit ledger of the noticee carried a balance of not less than ₹ ____________ throughout the period, and to that extent no interest can be demanded (Rule 88B(3)).
6.2 Penalty. Penalty cannot survive where the demand of tax fails. Without prejudice: (a) in a case not involving fraud, the penalty cannot exceed ten per cent. of the tax or ten thousand rupees, whichever is higher (section 73(9) / section 74A(5)(i)); (b) the penalty equal to tax is confined to cases where fraud, wilful misstatement or suppression is established (section 74(1) / section 74A(5)(ii)), which, for the reasons in Part III, it is not; (c) where a penalty is imposed under section 73, 74 or 74A, no penalty for the same act or omission can be imposed under any other provision (section 75(13)) — the proposal to levy penalty under section 122 / 125 in addition is therefore not maintainable.
PART VII — AMOUNTS ADMITTED AND PAID
7.1 The noticee accepts the liability under Issue ___ to the extent of ₹ ____________ and has paid it, with interest, as below. [Delete this Part if nothing is admitted.]
| Issue | Tax (₹) | Interest (₹) | Penalty, if any (₹) | FORM GST DRC-03 ARN | Date |
|---|
| ____ | ____________ | ____________ | ____________ | ____________ | ____________ |
7.2 The payment having been made within the period allowed by section ____________ [73(8) — thirty days of issue of the notice, no penalty; 74(8) — thirty days, with penalty of twenty-five per cent.; 74A(8)(ii) — sixty days, no penalty; 74A(9)(ii) — sixty days, with penalty of twenty-five per cent.], the proceedings in respect of that amount stand concluded, and an intimation in FORM GST DRC-05 may kindly be issued under Rule 142(3).
PART VIII — PERSONAL HEARING
8. The noticee requests an opportunity of being heard before any decision adverse to it is taken, as required by section 75(4), and has selected the option for personal hearing in FORM GST DRC-06. The noticee also requests leave to file additional submissions and documents at or before the hearing.
PRAYER
In view of the above, the noticee prays that: (a) the show cause notice {{notice_ref}} dated {{notice_date}} be dropped in full; (b) in the alternative, the demand be restricted to ₹ ____________ as computed in Part V, with consequential reduction of interest; (c) no penalty be imposed, or the penalty be restricted as submitted in Part VI; (d) the payment made through FORM GST DRC-03 be taken on record and adjusted; and (e) a personal hearing be granted before the order is passed.
VERIFICATION
I, {{signatory_name}}, {{signatory_designation}} and authorised signatory of {{client_name}}, do hereby solemnly affirm and declare that the information given hereinabove is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom.
Place: __________________
Date: 1 October 2026
For {{client_name}}
_______________________________
{{signatory_name}}
{{signatory_designation}} — Authorised Signatory
LIST OF ANNEXURES
| Annexure | Description | Pages |
|---|
| A | Copy of the show cause notice and summary in FORM GST DRC-01 | |
| B | Earlier replies (ASMT-11 / DRC-01A Part B) with acknowledgements | |
| C | Reconciliation statement for Issue 1 | |
| D | Reconciliation statement and supporting invoices for Issue 2 | |
| E | FORM GST DRC-03 and challans for amounts paid | |
| F | Authorisation in favour of the signatory / authorised representative | |
- Drafting hint: file within the date stated in the notice. If the reconciliations need more time, ask for it in writing before that date — section 75(5) allows adjournment on sufficient cause, but not more than three times in the proceedings.
- Drafting hint: answer every issue in the notice, even the small ones. The order cannot demand more than the notice or rest on grounds outside it (section 75(7)), but anything left unanswered will be confirmed as it stands.
- Drafting hint: decide pay-or-contest issue by issue before the closure window runs out — thirty days from issue of the notice under sections 73 and 74, sixty days under section 74A. The no-penalty closure is not available where self-assessed tax or tax collected was not paid within thirty days of its due date (section 73(11) / section 74A(11)).
- Drafting hint: the DRC-06 text box takes only a short reply. Put a five-line summary there, state that the detailed reply and annexures are uploaded, and keep the acknowledgement.
- Drafting hint: note the order deadline. Under section 75(10) the proceedings are deemed concluded if the order is not issued within the period in section 73(10), 74(10) or 74A(7).
