Answer

1. F

   Facts

   If you do not reply, the officer can start demand proceedings under Sec 73 or 74, or refer the case for audit or investigation. The SOP sets short timelines for this.

2. P

   Provisions and law

   • Sec 61, CGST Act 2017Officer may scrutinise returns, inform discrepancies and seek an explanation; if accepted, no further action; if not, action under Sec 65, 66, 67, 73 or 74
   • Instruction 02/2022-GST (22 March 2022)SOP for scrutiny: one ASMT-10 per GSTIN per year, specific and quantified discrepancies, DRC-03 payments to be considered, timelines for ASMT-12 or further action
   • Sec 73, CGST Act 2017Demand in non-fraud cases, for periods up to FY 2023-24
3. A

   Analysis

   Sec 61(3) allows action if no satisfactory explanation is given. Instruction 02/2022-GST says Sec 73 or 74 action should start within 15 days after the reply period lapses. Example: an ignored ASMT-10 for ₹2 lakh can become a show cause notice with interest and penalty. A reply, even a partial one, is always better.

4. C

   Conclusion

   1. 1Do not ignore the notice.
   2. 2File at least a holding reply asking for time.
   3. 3Prepare the full reply quickly.
   4. 4Pay what you accept.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.