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Got a GST notice? Start by identifying the form, GSTIN, tax period, issuing authority, date of service and exact response deadline. An ASMT-10 scrutiny notice, DRC-01B or DRC-01C mismatch intimation, show-cause notice and demand order are different stages with different remedies. Treating them as interchangeable can lead to a late, incomplete or procedurally ineffective response.
This guide explains how to triage the notice, reconcile each allegation, decide between explanation and payment, preserve evidence and escalate to an appeal when an order has already been passed. It describes India’s central GST framework and portal workflows; it is not a substitute for advice on a disputed, high-value, fraud-related or time-barred matter.
First, classify the GST communication
Read the heading and reference number before reviewing the figures. The form tells you what the department is asking you to do and which procedural stage applies.
| Communication | What it generally means | Typical response or remedy | Deadline source |
|---|---|---|---|
| ASMT-10 | Return scrutiny notice listing discrepancies identified by the proper officer. | Explain the discrepancy in ASMT-11, or accept the amount and pay the resulting tax, interest and other amount where appropriate. | Date stated in the notice; Rule 99 provides up to 30 days from service, with further time if the officer permits. |
| DRC-01B | System intimation of a liability mismatch between GSTR-1/IFF and GSTR-3B. | Use the form-specific Part B response to explain the difference or pay the admitted amount, following current portal instructions. | The intimation and current portal workflow; vendor help describes a seven-day response window, which must be verified against the live portal. |
| DRC-01C | System intimation concerning an input-tax-credit mismatch. | Match the payment details and period, then submit the explanation or payment response required in the form. | The intimation and current portal workflow; vendor help describes seven days and possible later filing restrictions. |
| Show-cause notice | Formal proposal to demand tax, interest or penalty, or take another adverse action. | Submit the form-specific written reply, evidence and hearing request within the stated period. | The notice and the governing provision; do not borrow an ASMT-10 deadline. |
| Demand or adjudication order | The authority has decided the case and created an enforceable demand or other order. | Pay, seek correction where legally available, or file an appeal. A reply to an earlier notice is not an appeal against the order. | For a first appeal, the GST Portal FAQ describes three months from communication of the order, subject to applicable law. |
The same underlying mismatch can appear in different forms at different times. Always record the form number, reference number, tax period, issuing officer and service date in a case log.
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Before analysing whether the department is right, secure proof of when and how the communication was served. The response period usually runs from the date of service or communication, not from the date someone first opens the attachment.
Record these fields
- GSTIN and legal name shown on the notice
- Form number and reference or document identification number
- Tax period, financial year and return type involved
- Date on the notice, date it appeared on the portal and date of actual service
- Name and designation of the issuing authority
- Exact deadline and the submission channel specified
- Allegation-by-allegation amount, including tax, interest, penalty and any other component
- Attachments, annexures, downloaded portal files and payment references
Download the original notice and acknowledgement from the GST portal, preserve the email or SMS alert where available, and use a calendar reminder several days before the stated deadline. Do not infer a date from another notice type. An ASMT-10 form asks for an explanation by the date specified in that form, while Rule 99 describes up to 30 days from service for the scrutiny response, with additional time only if the proper officer permits it.
How to answer an ASMT-10 scrutiny notice
An ASMT-10 is titled “Notice for intimating discrepancies in the return after scrutiny.” It is an opportunity to explain the listed discrepancies before the scrutiny process moves further. The notice should identify the return issues; your task is to answer each item with a traceable reconciliation rather than a general denial.
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1. Convert the notice into a discrepancy schedule
Create one row for every allegation. Use the department’s wording, return period, reported figure, proposed difference and your explanation. Add columns for source records, corrective action and the final response paragraph number.
| Working-paper column | What to enter |
|---|---|
| Notice item | Exact paragraph or serial number from ASMT-10 |
| Return data | Relevant GSTR-1, GSTR-3B, electronic liability or credit-ledger figure |
| Books and source data | Ledger, invoice register, debit or credit notes, payment record and period-end adjustments |
| Difference | Taxable value, tax, input tax credit or other amount, separated by tax head where possible |
| Reason | Timing difference, amendment, cancellation, classification, duplicate entry, eligibility issue or another fact supported by records |
| Evidence index | File name or annexure number that lets the officer verify the explanation |
| Action | Explain, correct a return where permitted, pay an admitted amount or obtain advice |
2. Reconcile the allegation to primary records
Compare the return named in the notice with the books and transaction-level records for that period. Trace totals back to invoices and tax ledgers. Check whether the apparent difference is caused by a reporting period mismatch, an amendment reported in a later return, a credit note, a duplicate, a place-of-supply classification, a reverse-charge entry or an input-tax-credit timing issue. Do not assume the officer used the same cut-off date or source report as your accounting team.
There is no universal evidence bundle for every ASMT-10. The appropriate documents depend on the allegation. A sales mismatch may need invoice registers, credit notes and GSTR-1 reconciliation; an input-tax-credit issue may need purchase registers, supplier data, tax invoices, payment evidence and eligibility analysis; a tax-payment issue may need challans, electronic liability-ledger entries and bank records. Include only relevant material, clearly indexed.
3. Choose explanation, payment or both
Rule 99 allows a registered person to accept a discrepancy and pay the resulting tax, interest and other amount, or furnish an explanation in ASMT-11. If the explanation is accepted, the proper officer communicates that through ASMT-12. The choice is fact-dependent:
- Explain the item when the return is correct or the apparent difference is demonstrably a timing, amendment or data issue.
- Pay an admitted amount when your reconciliation confirms that tax or interest is actually payable and the amount can be calculated reliably.
- Separate accepted and disputed portions when only part of the notice is correct. Explain the disputed balance instead of presenting one unsupported net figure.
CBIC scrutiny instructions state that discrepancies should be specific and quantified where possible. For an accepted discrepancy, the instruction describes payment through DRC-03 and notifying the officer or furnishing an ASMT-11 explanation. Do not pay a disputed amount automatically merely to close the notice; assess the legal and factual position first.
4. Draft the ASMT-11 response
- Identify the notice number, GSTIN, tax period and service date.
- Use the same serial order as ASMT-10 so every allegation has a direct answer.
- State the department’s figure, your reconciled figure and the numerical difference.
- Explain the cause in plain language, then point to the supporting annexure and ledger or return row.
- State whether the discrepancy is denied, accepted, partly accepted or already corrected.
- For any payment, give the tax head, interest calculation, payment date and DRC-03 or other applicable reference.
- Request acknowledgement and identify a contact person for clarification.
Upload legible, searchable files where the portal permits. Keep the response within the prescribed size and file-format limits shown at submission; if the portal rejects an attachment, retain a screenshot and follow the official alternative submission route rather than silently omitting evidence.
DRC-01B and DRC-01C require separate checks
These system-generated mismatch workflows are not substitutes for ASMT-10. They use different data comparisons and can have different portal consequences.
DRC-01B: liability mismatch
DRC-01B concerns a mismatch between liability reported in GSTR-1 or an Invoice Furnishing Facility submission and liability reported in GSTR-3B. Review the exact period and tax heads used by the intimation. Reconcile outward-supply registers, amendments, credit notes, advances, reverse-charge entries and the relevant GSTR-3B payment before choosing a response.
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DRC-01C: input-tax-credit mismatch
DRC-01C is an input-tax-credit mismatch process. The GST Portal FAQ identifies matching details that include the payment ARN, GSTIN, stated cause of payment and tax period. Check each field against the actual payment and return records before submitting Part B.
Vendor help for DRC-01C describes a seven-day response period and warns that failure to respond may prevent filing GSTR-1 or IFF for a subsequent period until payment or explanation is submitted. Because portal controls and legal instructions can change, treat that seven-day figure and the filing restriction as vendor guidance and confirm the current official instruction displayed for your GSTIN.
Do not merge the two DRC workflows
- DRC-01B asks why declared outward liability and paid liability differ.
- DRC-01C asks why input-tax-credit figures differ from the system’s comparison.
- The relevant return periods, ledgers, payment references and supporting schedules are different.
- A response that answers one mismatch does not automatically answer the other.
Show-cause notices: prepare for adjudication
A show-cause notice is more consequential than a routine scrutiny intimation because it proposes an adverse determination such as tax, interest or penalty. Read the charging provision, allegations, period, proposed amount and hearing details. The notice may require a written reply, personal hearing request or both.
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- List each allegation and the legal provision cited.
- State the facts supported by contemporaneous records.
- Identify calculation errors, duplicate periods, incorrect tax heads or missing adjustments.
- Address intent-based allegations separately. Fraud, suppression or wilful misstatement require specialist analysis; do not answer them with a simple reconciliation paragraph.
- Attach an indexed evidence pack and a calculation showing the amount, if any, that is admitted.
- Request a hearing where the notice or applicable procedure provides for one, and preserve proof of the request.
Never assume that paying the principal tax ends a show-cause proceeding. Interest, penalty, limitation, disclosure and payment provisions can produce different outcomes. Obtain qualified advice when the notice alleges fraud or suppression, covers several years, involves a large liability or threatens registration or business continuity.
If a demand order has already been passed
An order changes the question from “How do I explain the discrepancy?” to “What remedy is available against this decision?” Download the signed order and record the date it was communicated. Compare the final findings with your reply, hearing record and calculations.
The GST Portal FAQ describes a first-appeal period of three months from communication of an adjudicating authority’s decision or order and a pre-deposit of 10% of the disputed tax before filing. These figures must be checked against the current statute, applicable special provisions and the facts of the order. Calculate the deadline from the actual communication date, not from an internal review date.
Appeal preparation checklist
- Copy of the order and proof of communication
- Original show-cause notice, written reply and hearing submissions
- Issue-wise statement of disputed tax, interest and penalty
- Reconciliations and primary records supporting each ground
- Payment or pre-deposit reference, if required
- Draft grounds that identify factual, calculation and legal errors
- Evidence that the appeal was filed and acknowledged within time
A notice reply is not an appeal, and an appeal period does not normally begin merely because an earlier notice was received. If the deadline has passed, ask a tax professional to assess limitation, condonation and any recovery consequences immediately.
Preserve a defensible compliance file
Keep one folder for each GSTIN, tax period and notice. The minimum practical file should contain:
- Original notice, order or portal intimation in its native downloaded format
- Service evidence, email or SMS alert and portal screenshots where relevant
- Filed reply, annexures, upload confirmation and ARN or acknowledgement
- Versioned reconciliation workbook and the underlying ledgers or registers
- Invoices, debit and credit notes, payment challans and electronic-ledger extracts used in the answer
- DRC-03, DRC-01B or DRC-01C payment and response references, where applicable
- Internal approval or advice record explaining why an amount was paid, disputed or corrected
Name files consistently, restrict editing of the submitted version and retain a read-only copy. Reconciliations and accounting software can reduce recurring data-entry work, but software does not determine whether a legal demand is correct or whether evidence proves eligibility.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Common failure modes and how to correct them
Using the wrong deadline
Problem: Applying the 30-day ASMT-10 period to a DRC mismatch, or assuming every GST notice allows seven days.
Fix: Use the deadline printed in the particular communication, the applicable rule and the live portal instruction. Ask for permitted additional time before the original deadline expires.
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Sending a generic “all taxes are paid” reply
Problem: A broad assertion does not answer a quantified discrepancy.
Fix: Answer each serial number with a figure, cause, document reference and requested treatment.
Uploading an unexplained spreadsheet
Problem: Raw exports force the officer to reconstruct your argument.
Fix: Add a cover reconciliation, definitions, tax-head totals and an evidence index. Preserve the raw file separately.
Paying before deciding whether the amount is disputed
Problem: Payment can be treated as acceptance or may affect later strategy, while an avoidable payment ties up cash.
Fix: Split admitted and disputed amounts, calculate interest accurately and obtain advice for material sums before using DRC-03 or another payment route.
Ignoring portal acknowledgements
Problem: A drafted reply is not proof of filing.
Fix: Confirm the ARN or acknowledgement, download the filed copy and check that every attachment is present and readable.
Waiting until after an order
Problem: An unanswered notice can proceed to adjudication and create a separate appeal deadline.
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When professional advice is warranted
Obtain qualified tax or legal advice promptly when the notice alleges fraud, suppression or wilful misstatement; covers multiple financial years; involves a large or cash-flow-critical amount; challenges input-tax-credit eligibility across many suppliers; concerns cancellation or suspension of registration; or has already become an order. An adviser can test limitation, jurisdiction, computation, evidence and the correct remedy—questions that a bookkeeping reconciliation alone cannot resolve.
For routine, low-value discrepancies, a disciplined internal process can still be effective: classify the form, calendar the correct deadline, reconcile every allegation, choose explanation or payment deliberately, file through the specified channel and preserve the complete record.
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