How to Reply to a GST Notice Online: Step-by-Step Guide (2026)

Last updated: 10 April 2026. Receiving a GST notice does not have to escalate into a serious dispute — but ignoring it always does. Identify the notice type correctly, gather your documents, draft a specific response, and submit it on the GST portal before your deadline. For most system-generated notices (DRC-01B, DRC-01C), you have just 7 days. For Show Cause Notices under Section 73 or 74A, you typically have 30 days.

Applicability Note: This guide is based on GST provisions applicable as of 10 April 2026. Note that Section 74A (introduced via Union Budget 2024) applies to demand proceedings for FY 2024-25 onwards, replacing Sections 73 and 74 for those years. Sections 73 and 74 continue to govern cases from FY 2017-18 through FY 2023-24. Always verify the current position on gst.gov.in or with a GST professional before acting.

Who Should Care?

This guide applies to:

• GST-registered taxpayers who have received any notice on the GST portal
• Businesses that received a DRC-01B or DRC-01C intimation and are unsure how to respond
• Taxpayers facing a Show Cause Notice under Section 73, 74, or 74A
• Anyone who has missed a prior GST notice and needs to understand the consequences

1. Know Your Notice Type — Deadline and Consequences Differ

DRC-01B: GSTR-1 vs GSTR-3B Mismatch (Rule 88C)

Issued automatically when the mismatch between GSTR-1 declared liability and GSTR-3B paid liability exceeds the prescribed threshold under Rule 88C. The threshold is prescribed under Rule 88C and configured in the GST portal — verify the current trigger parameters on gst.gov.in, as these have been updated since the rule's initial notification. Respond within 7 days by either paying the differential tax via Form DRC-03 with interest, or uploading a written explanation with reconciliation supporting the difference.

DRC-01C: ITC Mismatch (Rule 88D)

Issued automatically when ITC claimed in GSTR-3B exceeds GSTR-2B ITC by more than ₹1 lakh or 20% of GSTR-2B ITC (whichever is lower). The same 7-day response window applies — pay the excess or explain it with documentation (e.g., supplier filed late, transition credit, etc.).

Show Cause Notice Under Section 73 (Non-Fraud, FY 2017-18 to FY 2023-24)

Applies to cases of short-paid, unpaid, or wrongly claimed ITC without any allegation of fraud. You have 30 days to reply.

Penalty Concession under Section 73:

• Pay tax + interest before the SCN is issued (Section 73(5)): No penalty, proceedings concluded
• Pay tax + interest within 30 days of receiving the SCN (Section 73(8)): No penalty, proceedings concluded
• After adjudication order (Section 73(9)): Penalty = 10% of tax or ₹10,000, whichever is higher

Use this concession if the demand is valid — voluntary early payment is significantly cheaper.

Amnesty Scheme (Section 128A): For Section 73 demand notices relating to FY 2017-18, 2018-19, and 2019-20 in non-fraud cases, a conditional waiver of interest and penalty was available if the full principal tax was paid by 31 March 2025. If you have a pending Section 73 demand for these years, check whether you qualify for this waiver under Rule 164 of the CGST Rules.

Show Cause Notice Under Section 74A (New Unified Regime — FY 2024-25 Onwards)

Section 74A was introduced via Finance (No. 2) Act, 2024 and applies to all demand proceedings for FY 2024-25 onwards, replacing the separate Sections 73 and 74. It establishes a single uniform framework regardless of whether fraud is alleged.

Time limit under Section 74A: 42 months from the due date of the annual return for the relevant financial year — this is a uniform timeline regardless of whether fraud is alleged or not.

Section 74A Penalty Structure (for FY 2024-25 onwards):

NON-FRAUD cases:

• Paid before notice issued: No penalty
• Paid within 60 days of notice: No penalty
• After adjudication order: 10% of tax due (minimum ₹10,000)

FRAUD cases (fraud, willful misstatement, suppression of facts):

• Paid before notice issued: 15% penalty
• Paid within 60 days of notice: 25% penalty
• Paid within 60 days of order: 50% penalty
• After 60 days of order: 100% penalty (equal to tax amount)

Show Cause Notice Under Section 74 (Fraud, FY 2017-18 to FY 2023-24)

Applies when fraud, wilful misstatement, or suppression of facts is alleged. Penalties are mandatory and can reach 100% of the tax due. If you have received a Section 74 notice, consult a qualified CA or GST practitioner immediately — do not attempt to draft a response without professional guidance.

2. Gather Your Documents Before Drafting

The strength of your reply depends on the documentary evidence you produce. Assemble these before writing a single word:

• Purchase invoices matching the ITC you claimed
• Sales invoices for the period under scrutiny
• GSTR-2B statements (downloaded from the portal) for the disputed months
• Filed copies of GSTR-3B for the relevant return periods
• Purchase register / purchase ledger reconciled against your GST returns
• Bank statements to corroborate tax payments and business transactions
• Correspondence with suppliers if defending ITC based on their late GSTR-1 filing
• E-way bills and delivery challans if the dispute involves movement of goods

Organise documents by month and return period before drafting. A well-organised submission reduces the chance of follow-up queries.

3. Draft Your Reply — Be Specific and Evidence-Based

Your reply must be factual, specific, and evidence-based. Avoid vague language ("we have complied with all provisions" carries no weight with officers). Use this framework:

1. Acknowledge the notice: State the notice number, date, and section under which it was issued
2. Address each allegation individually: If the notice has three points, respond to each one separately and clearly — do not write a general response
3. Cite the relevant provision: Reference the section, rule, and notification you are relying on
4. Attach supporting evidence: Reference each document (e.g., "As per GSTR-2B for October 2025, attached as Annexure A...")
5. State your conclusion: Whether you are paying the demand, contesting it, or requesting additional time
6. Keep the tone professional: Avoid confrontational language — the officer reviewing your reply is making a factual determination

For large or complex demands, have a CA or GST advocate review your draft before submission.

4. Submit Your Reply on the GST Portal

1. Log in to gst.gov.in using your GSTIN and credentials
2. Navigate to Services → User Services → View Notices and Orders
3. Locate the relevant notice by notice number or date
4. Click Reply against the notice
5. Type or paste your written response in the reply form
6. Upload supporting documents in PDF format (typically up to 5 MB per attachment) — name each file clearly before uploading
7. For DRC-01B and DRC-01C: if paying the differential amount, complete the DRC-03 payment first, then link the payment reference number in your reply
8. Submit the reply and wait for the acknowledgment screen

After submission, the portal generates an Application Reference Number (ARN). Download and save this immediately. Note the date and ARN in your compliance register. Follow up on the portal after 30–45 days to check whether a further order or query has been issued — do not assume the matter is closed after submission.

5. Consequences of Ignoring a GST Notice

Key Takeaways

• DRC-01B (Rule 88C) is for GSTR-1 vs GSTR-3B mismatch; DRC-01C (Rule 88D) is for GSTR-2B vs GSTR-3B ITC mismatch — both require response within 7 days or GSTR-1 gets blocked
• Section 74A (introduced for FY 2024-25 onwards) is the new unified demand regime replacing Sections 73 and 74. For non-fraud cases: no penalty if paid within 60 days of notice; for fraud cases: 25% penalty if paid within 60 days of notice, rising to 100% after 60 days of order. Time limit is a uniform 42 months regardless of fraud allegation.
• For pre-FY 2024-25 cases under Section 73: pay tax + interest within 30 days of the SCN for nil penalty; after adjudication, penalty is 10% of tax or ₹10,000 (whichever is higher)
• Never ignore a GST notice — even DRC-01B/01C notices that seem minor will block your GSTR-1 and damage buyer relationships if unanswered
• Submit your reply with specific, document-referenced rebuttals — generic compliance statements carry no weight
• Download and save the acknowledgment ARN after every portal submission and monitor the notice section for follow-up orders

Frequently Asked Questions

How do I reply to a DRC-01C notice on the GST portal?

Log in to gst.gov.in → Services → User Services → View Notices and Orders. Locate the DRC-01C notice, click Reply, and either (a) pay the excess ITC via Form DRC-03 and attach the payment reference, or (b) upload a written explanation with a reconciliation statement explaining why your GSTR-3B ITC exceeds GSTR-2B. You must respond within 7 days — non-response blocks your GSTR-1 filing.

What is the difference between DRC-01B and DRC-01C?

DRC-01B is issued under Rule 88C when the tax liability in your GSTR-1 significantly exceeds the tax paid in GSTR-3B (suggesting a possible underpayment of tax). DRC-01C is issued under Rule 88D when the ITC claimed in GSTR-3B significantly exceeds the ITC available in GSTR-2B (an excess ITC claim). Both are system-generated, both require a 7-day response, and both can block your GSTR-1 if unanswered.

What is Section 74A and how does it differ from Section 73?

Section 74A was introduced by the Finance (No. 2) Act, 2024 and applies to all demand proceedings for FY 2024-25 onwards. It replaces the separate Sections 73 (non-fraud) and 74 (fraud) with a single unified regime. Key difference from Section 73: penalty concession under 74A is 25% if paid within 60 days of the notice (vs 10% within 30 days under old Section 73). The time limit under Section 74A is a uniform 42 months from the due date of the annual return, regardless of whether fraud is alleged or not.

Can I ignore a GST notice if I believe the demand is incorrect?

No. Even if you believe the demand is entirely incorrect, you must respond within the deadline. Ignoring a GST notice means the officer proceeds ex-parte (without your input) and passes a demand order confirming the full amount — you also lose any available penalty concessions. The correct approach is to reply on the portal, contest each allegation with evidence, and let the adjudication process play out in your favour.

Do I need a CA to reply to a GST notice?

For simple system-generated notices (DRC-01B, DRC-01C) with clear reconciliation evidence, you can reply yourself by following the portal process. For Show Cause Notices under Section 73, 74, or 74A — especially where large tax amounts, penalty, or fraud allegations are involved — involving a qualified CA or GST practitioner significantly improves your outcome. The earlier you consult, the more options you have; late consultations after ex-parte orders are more expensive and often avoidable.

Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. GST rules are subject to frequent changes through notifications and circulars. Please consult a qualified tax professional or verify the current provisions on the official GST portal (gst.gov.in) before making any compliance decisions.

Have you received a GST notice and need help drafting a reply? Our GST experts handle DRC-01C responses, Section 73 adjudications, and Section 74A proceedings → gstconsultancy.com