Tax notices + litigation · GST Notice
DRC-01 / DRC-01A: Show Cause Notice under GST
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Facts
DRC-01A (Pre-SCN): An intimation before the formal SCN, giving you a chance to pay and close the matter without formal proceedings. Respond within 30 days. If you pay + interest, the SCN is not issued.
Provisions and law
- CGST Act 2017, Sec 73 (non-fraud), Sec 74 (fraud) | Rule 100
Analysis
DRC-01 (Show Cause Notice): Formal SCN issued under Sec 73 or 74. Sec 73 = non-fraud cases (10% penalty). Sec 74 = fraud/suppression (100% penalty). Reply within 30 days. If the GST officer is satisfied with your reply, the proceedings are dropped. If not, a personal hearing is scheduled before an order is passed. Always respond to DRC-01A, it's the cheapest way to close a GST matter. Ignoring it escalates to DRC-01 with higher stakes.
Conclusion
- Acknowledge receipt and state your position clearly
- Address each point in the SCN specifically, don't ignore any allegation
- Provide GSTR-1, GSTR-3B, GSTR-2B reconciliation for the disputed period
- If ITC is being denied: provide tax invoices, e-way bills, payment proof from vendor
- Cite GST Council clarifications and AAR rulings if applicable
- Request personal hearing if the case is complex
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