The GST Notice Pipeline Has Changed Significantly: Since FY 2024-25, a single new provision – Section 74A – has replaced the old fraud/non-fraud split at the notice stage, giving every taxpayer a uniform 42-month window regardless of how the case is framed. Auto-generated system notices (DRC-01B for liability mismatch, DRC-01C for ITC mismatch) now fire directly from GSTN’s matching engine within days of filing, with a strict 7-day reply window – and an unanswered DRC-01C can block your next period’s GSTR-1 filing entirely. Meanwhile, after years of functioning only on paper, the GST Appellate Tribunal (GSTAT) is now actually hearing appeals – the Delhi Principal Bench and Mumbai Bench are operational, with more benches rolling out. This guide walks through every notice type, the exact process, and how to respond.
Non-filing, fraud, or other grounds for cancellation
§29
REG-18 (7 days)
MOV-09/MOV-10
E-way bill/transit detention
Goods detained for documentation issues
§129
Pay or object within prescribed period
2. ASMT-10/11/12 – Scrutiny of Returns (§61)
ASMT-10 is the gentlest stage of GST enforcement – an invitation to explain, not a demand. Under §61 CGST Act, the proper officer scrutinises filed returns for discrepancies – mismatches between GSTR-1 and GSTR-3B, between ITC claimed and GSTR-2B, or anomalies against e-way bills and e-invoices. If something doesn’t reconcile, the officer issues ASMT-10. There is no fixed statutory deadline for issuing ASMT-10 – it can be raised any time within the period records must be maintained (generally up to 6 years), though GSTN’s Automated Return Scrutiny Module (launched May 2023, now covering returns from FY 2019-20 onwards) has made this far faster and more systematic.
Step
Form
Timeline
What Happens
1. Notice
ASMT-10
No fixed deadline to issue
Officer flags specific discrepancy with GSTIN, tax period, and the figures that don’t reconcile
2. Reply
ASMT-11
30 days (extendable by 15 days on request)
Taxpayer explains the discrepancy or pays the differential tax + interest voluntarily
3a. Closure
ASMT-12
—
If officer is satisfied – proceedings dropped, no further action
3b. Escalation
DRC-01A / DRC-01
—
If no reply, unsatisfactory reply, or no payment – escalates to formal demand under §73/74/74A; alternatively officer may recommend audit under §65/66 or inspection under §67
ASMT-10 is preventive, DRC-01 is curative: Treat ASMT-10 as your best and cheapest opportunity to resolve a discrepancy. A well-documented ASMT-11 reply – with GSTR-1/3B/2B reconciliation, invoice-level backup, and a clear one-line explanation per discrepancy (“invoice dated March, tax paid correctly in April GSTR-3B” or “supplier filed GSTR-1 late, credit now reflects in subsequent GSTR-2B”) – resolves the vast majority of scrutiny notices without escalation.
3. DRC-01A – The Soft Pre-SCN Intimation
Rule 142(1A) – DRC-01A is an intimation, not a show cause notice. Before serving a formal SCN under §73 or §74, the proper officer may first communicate the tax, interest, and penalty he has ascertained, in Part A of Form DRC-01A. This gives the taxpayer a chance to settle before the matter becomes a formal legal proceeding.
Part
Who Fills It
Content
Part A
Tax Officer
Details of tax, interest, and penalty as ascertained by the officer – sent as an intimation before formal SCN
Part B
Taxpayer
Response – either (a) communicate part/full payment already made, or (b) submit a reply stating why the ascertained liability is not acceptable, with reasons
Why DRC-01A matters: If you pay the ascertained amount in full at the DRC-01A stage (before formal SCN), you avoid the formal §73/74/74A proceeding altogether – and under §73’s structure, voluntary payment before notice attracts NIL penalty. DRC-01A is optional for the department to issue, but where it is issued, responding promptly through Part B is almost always the cheapest resolution path.
4. DRC-01B and DRC-01C – Automated System-Generated Notices
⚠️ These are NOT discretionary – they fire automatically from GSTN’s matching engine. Unlike ASMT-10 (officer-initiated) or DRC-01A (officer-discretion), DRC-01B and DRC-01C are generated by the system itself, immediately after you file your returns, the moment a configured threshold is breached. Both carry only a 7-day reply window.
Notice
Trigger
Rule
Consequence of Non-Reply
DRC-01B – Liability Mismatch
Output tax liability declared in GSTR-1 is HIGHER than tax actually paid in GSTR-3B for the same period
Rule 88C
Escalates towards §73/74/74A demand proceedings if unresolved
DRC-01C – ITC Mismatch
ITC claimed in GSTR-3B is HIGHER than ITC available per GSTR-2B (auto-populated from suppliers’ GSTR-1/IFF) beyond a configured threshold
Rule 88D
You CANNOT file GSTR-1/IFF for the NEXT tax period until Part B reply is filed for the current one – this is the strongest automated enforcement lever in the system
Common Reasons Selectable in DRC-01C Part B Reply
ITC pertains to an earlier period – invoice appeared in past GSTR-2B but conditions of §16(2) weren’t satisfied then, claimed now
ITC inadvertently not claimed in the correct row of GSTR-3B in an earlier period; now corrected
ITC relates to inward supplies from SEZ units not reflected in GSTR-2B
Excess ITC reversed in an earlier period is being legitimately reclaimed now
Genuine excess claim due to typographical/rate error – acknowledged, will reverse with applicable interest
Other – explain in free text (up to 500 characters) with supporting documents
⚠️ Known practical issue with DRC-01C: The system compares ITC in GSTR-2B against ITC claimed in GSTR-3B using only invoices/debit notes – it does NOT currently account for Bill of Entry-based import IGST (since §16(2)(aa) refers only to “invoice and debit note,” not “bill of entry”). If your mismatch arises purely from import IGST credit, this is a known limitation – document this clearly in your “Others” reason and retain Bill of Entry/ICEGATE records as backup.
5. Section 73 vs Section 74 – The Old Fraud/Non-Fraud Split (FY up to 2023-24)
For all financial years up to and including FY 2023-24, demand and recovery proceedings continue to be governed by the original §73/§74 framework:
Parameter
§73 – Non-Fraud
§74 – Fraud / Wilful Misstatement / Suppression
When applicable
Genuine error, negligence, bonafide dispute, wrong classification – no intent to evade
Deliberate fraud, wilful misstatement, or suppression of facts with intent to evade tax – mens rea required
SCN time limit
3 months before expiry of 3 years from due date of annual return
6 months before expiry of 5 years from due date of annual return
Order time limit
3 years from due date of annual return
5 years from due date of annual return
Penalty – paid before notice
NIL (only tax + interest)
15% of tax
Penalty – paid within 30 days of SCN
NIL
25% of tax – DRC-05 issued, proceedings concluded
Penalty – paid within 30 days of order
N/A (order itself imposes 10%/₹10,000)
50% of tax – proceedings concluded
Penalty – if order passed, not paid in time
10% of tax OR ₹10,000, whichever higher
100% of tax (beyond 30 days of order)
§17(5) ITC restriction relief (Budget 2024): The Union Budget 2024 amended §17(5) to remove the blockage of ITC for tax paid under §74 (fraud cases) for demands relating up to FY 2023-24 – meaning the recipient’s ITC is no longer automatically denied merely because the supplier’s case was framed under §74, easing a long-standing pain point for genuine buyers caught up in supplier-side fraud allegations.
6. Section 74A – The New Unified Framework (FY 2024-25 Onwards)
🆕 Section 74A, inserted by the Finance (No. 2) Act, 2024 – applicable from FY 2024-25 onwards:
For ALL demand proceedings relating to non-payment, short payment, erroneous refund, or wrongly availed/utilised ITC for periods starting FY 2024-25 – whether or not fraud is alleged – the SCN must now be issued under the single, unified §74A, not under §73 or §74. This eliminates the threshold dispute that used to arise at the notice stage over whether §73 or §74 was the “correct” section to invoke.
Parameter
§74A Framework (FY 2024-25 onwards)
Notice time limit – uniform, regardless of fraud/non-fraud
42 months from the due date of filing the annual return for the relevant year
Order time limit
Within the prescribed period following the 42-month notice window (effectively giving a longer, harmonised overall limitation compared to the old 3-year/5-year split)
Reduced-penalty payment window
Extended from 30 days to 60 days – a key rationalisation introduced alongside §74A, giving taxpayers more time to settle at the lower penalty tier
Does §74A eliminate the fraud/non-fraud distinction?
NO – only at the notice-issuance stage. The underlying penalty rate still depends on whether fraud/wilful misstatement/suppression is established: non-fraud-type cases continue to attract the 10%/₹10,000 structure; fraud-type cases continue to attract the tiered 15%/25%/50%/100% structure – now with the 60-day (not 30-day) window for the reduced tiers.
Practical effect
A single SCN form and a single limitation clock – but the officer must still establish (and the taxpayer can still contest) whether fraud existed, because that determines which penalty tier applies and the case’s overall risk profile
Why §74A is a genuine improvement: Under the old regime, officers sometimes invoked §74 (the harsher provision) defensively – simply to preserve the longer 5-year limitation period – even in cases that were really non-fraud disputes. This created years of litigation purely over “was §73 or §74 the correct section,” with courts frequently quashing proceedings on this technical ground alone. §74A removes that procedural fight: the notice-stage section is no longer in dispute, so litigation can focus on the merits – whether tax is genuinely payable, and whether fraud/suppression is actually established for penalty purposes.
7. Which Provision Applies to My Case? – Decision Table
Financial Year of the Transaction
Governing Provision
Key Reference Point
Up to FY 2023-24
§73 or §74 (as the case may be)
Check whether the notice specifically alleges fraud/suppression with intent – if not properly alleged, §74 may be successfully challenged (see Section 8)
FY 2024-25 onwards
§74A (unified)
Single 42-month notice window; penalty tier still depends on fraud finding
Notice received but FY unclear from notice itself
Check the tax period specified in the notice
The financial year of the underlying transaction – not the date the notice is issued – determines which provision governs
⚠️ First thing to check on any GST demand notice: Before drafting any reply, identify (1) the financial year the demand relates to, and (2) which section is cited. If the notice cites §73/§74 for a period that should fall under §74A (FY 2024-25 onwards), or vice versa, this is a valid jurisdictional ground to raise in your reply – citing the wrong section for the wrong period is a procedural defect that has succeeded in quashing notices in multiple cases.
8. CBIC Crackdown on §74 Misuse – Mens Rea is Jurisdictional
CBIC Instruction dated 13 December 2023: §74 cannot be invoked merely because tax was not paid or short paid. The officer must have material evidence of fraud, wilful misstatement, or suppression of facts, and that suppression must be with intent to evade tax. Mere non-payment, a supplier’s cancelled GST registration, or an unverified intelligence report – without a specific finding of fraudulent intent – is NOT sufficient to invoke §74.
Case
Court & Date
Key Holding
Safecon Lifescience Pvt. Ltd. vs Addl. Commissioner
Allahabad HC, Sept 2025
§74 invoked merely on intelligence report + supplier’s cancelled registration, without specific fraud finding – quashed; ITC restored. Relied on Supreme Court’s holding (Khurja Scrap Trading) that “suppression” means failure to disclose with intent to evade, not mere omission.
Raghuvansh Agro Farms Ltd. vs State of U.P.
Allahabad HC, 17 Dec 2025
§74 proceedings for alleged circular trading quashed – all transactions were backed by tax invoices, e-way bills, transport documents, and bank payments; absence of foundational fraud ingredients renders the ENTIRE proceeding without jurisdiction, not merely defective.
This is a powerful defence, not just a technicality: If you receive a §74 notice (or, for newer periods, a §74A notice alleging fraud-tier penalty) that does not specifically articulate the fraud/suppression with supporting material evidence – and you have your invoices, e-way bills, transport documents, and bank payment trail in order – challenge the very jurisdiction to invoke the fraud provision. Courts have consistently held that absence of mens rea is not a minor defect but a complete bar to the proceeding.
CBIC Circular No. 254/11/2025-GST (27 October 2025): Where §74 (or the fraud tier of §74A) is held unsustainable for want of fraud/suppression, §75(2) requires the case to be re-determined as if the notice had been issued under §73 (or the non-fraud tier). This Circular clarifies that such re-determination must be carried out by the original Proper Officer – not by the Appellate Authority or GSTAT itself. This was directly applied by GSTAT in Sterling & Wilson Pvt. Ltd. vs Commissioner, Odisha (decided early 2026), where the Tribunal, having found no fraud established, remanded the matter to the Proper Officer rather than deciding the §73 quantum itself.
9. Departmental Audit (§65) and Special Audit (§66)
Provision
Who Conducts It
Trigger
Notice
Outcome
§65 – Departmental Audit
Commissioner or authorised officer (general audit by tax department)
Selection based on risk parameters; can cover any registered person
ADT-01 (15 working days’ prior notice)
Audit findings communicated; discrepancies feed into §73/74/74A demand if liability arises
§66 – Special Audit
Chartered Accountant or Cost Accountant nominated by the Commissioner (not a departmental officer)
Ordered during scrutiny/inquiry/investigation where complexity of accounts or revenue interest warrants external expert review
Direction in writing to the registered person
Special auditor’s report submitted to Commissioner; expenses borne by the department; findings can lead to demand proceedings
§65 audit period: Departmental audit under §65 must ordinarily be completed within 3 months of commencement, extendable by a further 6 months by the Commissioner for reasons recorded in writing. Cooperate fully – provide records promptly – since an uncooperative audit process itself can prompt escalation to inspection/search under §67.
10. Inspection, Search & Seizure (§67)
Power
Pre-condition
Authorisation Needed
Inspection
“Reason to believe” goods liable to confiscation are stored, or transactions are suppressed to evade tax
Authorisation in writing by an officer not below the rank of Joint Commissioner
Search
Reason to believe goods/documents relevant to proceedings are secreted at a place
Search authorisation (INS-01) by Joint Commissioner or above
Seizure
During search, goods/documents found liable to confiscation or relevant to proceedings
Part of the search authorisation; seizure list (INS-02) prepared on the spot
Provisional release of seized goods
On application by owner
Bond + security (INS-04) – goods released pending final adjudication
Confiscation is a separate track from recovery (post-Budget 2021): Following the Budget 2021 amendment, seizure and confiscation of goods/conveyances in transit was carved out as a distinct proceeding from the §74 recovery proceeding. This means the department can pursue confiscation/penalty on detained goods independently of – and even after – concluding the broader tax-demand proceeding against the same person.
11. GSTAT – Now Operational: Appeals Process
🆕 GSTAT is finally functioning — a major 2024-26 development: The GST Appellate Tribunal, provided for in the original 2017 law but non-functional for years, is now hearing real cases. The Principal Bench in Delhi has been operational since 2024 (and additionally took over anti-profiteering jurisdiction from the CCI effective 1 October 2024). The Mumbai Bench has commenced judicial functioning, hearing appeals from Maharashtra and Goa. Additional State Benches are being rolled out progressively through 2025-26.
Appeal Stage
Forum
Time Limit
Scope of Review
First appeal
Appellate Authority (Commissioner Appeals), §107
3 months from order (extendable 1 month)
Facts and law
Second appeal
GSTAT, §112
Within prescribed period from Appellate Authority’s order (department also notifying revised timelines as benches operationalise – verify current window before filing)
Facts AND law – unlike High Courts, GSTAT is NOT restricted to “substantial questions of law” and can re-examine the factual record
Further appeal
High Court, §117
180 days from GSTAT order
Substantial questions of LAW only
Final appeal
Supreme Court, §118
As prescribed
Substantial questions of law / SLP
Real GSTAT precedent confirms its fact-finding role: In Sterling & Wilson Pvt. Ltd. vs Commissioner, Odisha (heard through Dec 2025–Jan 2026), the Tribunal explicitly held that, unlike a second appeal under the Code of Civil Procedure (restricted to “substantial questions of law”), an appeal under §112 of the CGST Act is not so restricted – GSTAT is the last forum that examines questions of FACT, with High Courts and the Supreme Court (under §117/118) confined to questions of law. This makes GSTAT the appropriate – and often final practical – forum to contest factual findings such as whether fraud was genuinely established or whether a reconciliation was correctly rejected.
⚠️ Pre-deposit requirement still applies: Filing an appeal – whether before the Appellate Authority or GSTAT – requires pre-deposit of the admitted tax in full plus 10% of the disputed tax amount (subject to a cap) before the appeal is entertained. Factor this into your dispute strategy; an appeal cannot proceed without this payment.
12. Anti-Profiteering (§171) – Sunset, GSTAT Takeover & Possible Revival
§171, CGST Act: Any reduction in GST rate, or any benefit from additional ITC, must be passed on to the recipient by way of a commensurate reduction in price. Failure to do so is “profiteering.”
Date
Development
November 2017
National Anti-Profiteering Authority (NAA) established
1 December 2022
NAA dissolved; functions transferred to the Competition Commission of India (CCI)
Mid-2024
CCI tells the GST Council that anti-profiteering is “not its core function” – of roughly 167 cases, only 27 had been resolved in about 18 months
1 October 2024
Functions transferred (notification dated 30 Sept 2024) to the Principal Bench of GSTAT, which set up a dedicated Antiprofiteering Division
1 April 2025
Sunset date – no NEW anti-profiteering complaints accepted under §171 from this date onward. Cases filed BEFORE this date continue to be adjudicated.
Ongoing (confirmed into mid-2026)
GSTAT’s Antiprofiteering Division continues issuing final orders on pending pre-sunset cases – e.g., DG Anti-Profiteering vs C.G. Foods (the “Wai Wai” noodles case), TS-56-GSTAT(DEL)-2026-GST, decided 3 February 2026, with a ₹9 lakh profiteering finding
Under discussion (56th GST Council, Sept 2025)
Government reportedly considering a fresh, time-bound (~2-year) anti-profiteering mechanism tied to the GST 2.0 rate rationalisation (collapsing the 12%/28% slabs into a simplified 5%/18% structure) – to ensure rate cuts actually reach consumers. Not yet confirmed or notified as a revived scheme as of May 2026 – monitor for fresh notification.
⚠️ If your business is mid-litigation on a pre-sunset profiteering complaint: The sunset clause does NOT close existing cases – it only stops new ones from being filed. If you have a pending matter (filed before 1 April 2025), it continues before GSTAT’s Antiprofiteering Division under the same substantive law, and recent 2026 orders confirm active adjudication continues. Do not assume the sunset means your case lapses.
13. Common ITC Mismatch Triggers
Trigger
Why It Happens
How to Prevent/Resolve
Supplier files GSTR-1 late
Your ITC doesn’t appear in GSTR-2B for the period you claimed it
Reconcile monthly; claim only when reflected in GSTR-2B; follow up with supplier for timely filing
Supplier cancels registration / becomes a defaulter
ITC claimed from a cancelled-registration supplier draws scrutiny even if the original transaction was genuine
Vendor due-diligence before onboarding; periodic GSTIN status checks on key suppliers
Import IGST (Bill of Entry) not reflected in GSTR-2B
§16(2)(aa) technically only covers “invoice and debit note,” creating a system gap for BoE-based credit
Maintain ICEGATE/BoE records separately; flag as “Others” reason in DRC-01C with clear explanation
Credit notes not adjusted correctly
Supplier issues credit note; recipient doesn’t reverse corresponding ITC in the same/next period
Match credit notes against Table 4(A)(5)/4(A)(3) entries in GSTR-2B promptly
RCM (Reverse Charge) ITC claimed without correct self-invoice
RCM liability and corresponding ITC don’t reconcile against GSTR-2B (since RCM doesn’t flow from a supplier’s GSTR-1)
Maintain separate RCM working papers; ensure RCM ITC claim ties to self-paid tax, not GSTR-2B
ISD (Input Service Distributor) credit distribution errors
Cross-charge/ISD allocation mismatches between distributing and recipient GSTINs
Maintain ISD distribution working papers; reconcile against ISD return (GSTR-6)
No formal extension – resolve promptly to avoid GSTR-1 block
ASMT-10 (scrutiny)
30 days
+15 days on request
DRC-01 SCN under §73/§74/§74A
30 days (reply via DRC-06)
Case-specific; request in writing with reasons
§74A reduced-penalty payment window
60 days (extended from old 30-day rule)
—
Appeal to Appellate Authority (§107)
3 months from order
+1 month, with sufficient cause
Appeal to GSTAT (§112)
Prescribed period from Appellate Authority’s order – verify current window as benches operationalise
Condonation possible for sufficient cause
15. Response Strategy – Best Practices
1
Never ignore a notice. Silence is treated as tacit admission and escalates the matter automatically with no further opportunity to explain at that stage.
2
Identify the exact section and financial year cited in the notice – confirm whether §73/§74 (pre-FY2024-25) or §74A (FY2024-25 onwards) is the correct provision for that period.
3
Reconcile GSTR-1, GSTR-3B, GSTR-2B, and your books for every flagged period before drafting any reply – most disputes are resolved or substantially narrowed by reconciliation alone.
4
Decide: explain, pay, or contest – for genuine timing differences, explain with evidence; for genuinely due tax, pay via DRC-03 and report it (this often eliminates penalty entirely under §73/non-fraud tiers); for disputed demands, contest point-by-point with documentary and legal backing.
5
Draft a point-wise reply addressing each allegation specifically – generic or evasive replies weaken your position at every subsequent forum, including GSTAT.
6
Keep filing current returns while the matter is pending – a taxpayer who stops filing loses credibility at every forum.
7
Engage a CA/GST practitioner immediately for any notice using language suggesting fraud, suppression, or wilful misstatement – the stakes (penalty tier, possible prosecution under §132) are materially higher.
8
Save every acknowledgement – Reference Number (RFN), submitted PDF, and date/time of filing – for every reply you submit on the portal.
16. Practical Case Studies
Case 1: ASMT-10 to DRC-07 – Full Lifecycle
A trading company receives ASMT-10 highlighting a ₹5 lakh difference between GSTR-1 and GSTR-3B for FY 2023-24.
Company replies via ASMT-11: ₹3 lakh relates to invoices that were dated in March but the corresponding tax was correctly paid in the following month’s GSTR-3B (timing difference); ₹2 lakh was genuinely over-reported and already reversed in the next month.
Officer is not satisfied with the explanation for the full amount and escalates – issues DRC-01 (under §73, since FY 2023-24 and no fraud alleged) proposing a demand of ₹5 lakh + interest.
Company pays ₹2 lakh voluntarily via DRC-03 (the genuinely over-reported portion) and contests the remaining ₹3 lakh through a detailed DRC-06 reply with invoice-level evidence of the timing difference.
Officer confirms a reduced demand of ₹3 lakh and issues DRC-07.
Company appeals the ₹3 lakh portion to the Appellate Authority under §107, since the documentary evidence for the timing difference is strong.
Case 2: DRC-01C Blocking GSTR-1 – Urgent Resolution Needed
A manufacturer claims ITC in GSTR-3B for March 2026 that exceeds GSTR-2B availability by a significant margin, mainly due to import IGST on a Bill of Entry not reflected in GSTR-2B.
System auto-generates DRC-01C with a 7-day reply window.
Company’s April GSTR-1 filing is blocked until the DRC-01C Part B reply is submitted for March.
Company files Part B selecting “Others,” explaining the mismatch is entirely import IGST credit (Bill of Entry-based, not invoice-based), and attaches ICEGATE/BoE records as supporting evidence.
GSTR-1/IFF filing for April is unblocked immediately after the reply is submitted – no need to wait for an officer to act on the explanation itself, since filing the Part B reply (not its acceptance) unblocks the next period.
Case 3: Wrongly Invoked §74 – Successful Challenge
A pharma distributor receives a §74 SCN alleging fraudulent ITC based solely on the supplier’s later-cancelled GST registration and a generic intelligence report – with no specific finding of fraud or suppression by the distributor itself.
Distributor had full documentation: tax invoices, e-way bills, transporter records, and bank payment trails for every purchase from the supplier.
Relying on the Allahabad High Court’s Safecon Lifescience and Raghuvansh Agro Farms precedents (and the underlying CBIC Instruction of 13 December 2023), the distributor’s reply argues that mere supplier registration cancellation and an unverified intelligence report cannot establish the mens rea required for §74 jurisdiction.
If the adjudicating authority (or, on appeal, GSTAT) agrees that fraud is not established, the case must be re-determined as if issued under §73 by the original Proper Officer (per §75(2) and CBIC Circular 254/11/2025-GST) – not decided afresh by the Appellate Authority or Tribunal itself.
Practical benefit: Re-characterisation from §74 to §73 converts a 100%-penalty exposure into, at most, a 10%/₹10,000 exposure – a dramatic difference, in addition to removing any prosecution risk that typically accompanies fraud-tier findings.
17. Frequently Asked Questions
Q1. What is the difference between ASMT-10 and DRC-01?
ASMT-10 (under §61) is a preliminary scrutiny notice – the officer has spotted a discrepancy in your filed returns and is asking you to explain or correct it. There is no formal demand for payment yet; it’s an opportunity to resolve the issue early, and reply is via ASMT-11 within 30 days. DRC-01, by contrast, is a formal Show Cause Notice under §73, §74, or (for FY 2024-25 onwards) §74A – issued once the officer has concluded that tax, interest, and/or penalty is actually payable. DRC-01 starts the formal adjudication and recovery process, with reply via DRC-06. In short: ASMT-10 is preventive and exploratory; DRC-01 is curative and adjudicatory. Many DRC-01 notices arise specifically because an earlier ASMT-10 was not satisfactorily resolved.
Q2. My GST demand notice for FY 2022-23 cites Section 74A. Is that correct?
No – this is likely an error worth raising. Section 74A, inserted by the Finance (No. 2) Act 2024, applies to financial years 2024-25 onwards. For FY 2022-23, the correct provision is either §73 (non-fraud) or §74 (fraud/suppression), depending on the nature of the allegation, with their original 3-year/5-year limitation periods respectively. Citing §74A for a pre-FY2024-25 period is a jurisdictional/procedural defect that you should specifically raise in your DRC-06 reply – and, if necessary, on appeal. This kind of section-mismatch has been a successful ground for quashing notices in the past when the wrong provision was invoked for the wrong period.
Q3. I received a DRC-01C for ITC mismatch but I’m confident my claim is correct. What if I don’t reply within 7 days?
You should always reply within the 7-day window even if you believe your claim is fully correct – simply select the appropriate reason in Part B and explain it, rather than leaving it unanswered. If you don’t reply, two things happen: (1) you lose the opportunity to proactively explain the position at this stage, and (2) most importantly, you will be unable to file GSTR-1/IFF for the next tax period until the reply is submitted – this is a hard system block, not a discretionary penalty, so it affects your ongoing compliance and your customers’ ability to claim ITC from your supplies in the interim. Filing the Part B reply (with a genuine explanation, even if you believe no correction is needed) unblocks your next GSTR-1 immediately, regardless of whether the officer later agrees with your explanation.
Q4. Can I appeal a GST order to the GST Appellate Tribunal now, or is it still not functional?
GSTAT is now functional, though the rollout is progressive rather than complete nationwide. The Principal Bench in Delhi has been operational since 2024 and additionally took over anti-profiteering jurisdiction from the CCI effective 1 October 2024. The Mumbai Bench has commenced judicial functioning, hearing appeals from Maharashtra and Goa. Additional State Benches are being activated progressively through 2025-26. If your state’s bench is not yet operational, check the GSTAT portal for the current rollout status and applicable transitional filing arrangements – historically, where a Tribunal bench wasn’t yet functional, the limitation period for filing the appeal was extended/suspended by government notification pending bench operationalisation, so verify the current notified position for your jurisdiction before assuming you’ve missed a deadline.
Q5. Is the National Anti-Profiteering Authority (NAA) still active? Can I file a fresh complaint about a price increase after a recent GST rate change?
The NAA itself was dissolved in December 2022. Its functions moved to the Competition Commission of India, and then – effective 1 October 2024 – to a dedicated Antiprofiteering Division within the Principal Bench of GSTAT. Critically, 1 April 2025 was set as the sunset date: no fresh anti-profiteering complaints under §171 are being accepted from that date onward. So if you’re asking whether you can file a brand-new complaint today, the answer is generally no, under the current framework. However, two things to note: (1) cases filed before 1 April 2025 continue to be actively adjudicated by GSTAT’s Antiprofiteering Division – recent 2026 orders confirm this; (2) the government has reportedly discussed reviving a time-bound anti-profiteering mechanism in connection with the GST 2.0 rate rationalisation, but as of May 2026 this has not been confirmed as a notified, operative scheme. Monitor official GST Council and CBIC announcements for any revival before assuming the door is permanently closed.
GCA handles the complete GST notice lifecycle – ASMT-10/DRC-01A/DRC-01B/DRC-01C reply drafting, GSTR-1/3B/2B reconciliation, Show Cause Notice response under §73/§74/§74A, voluntary disclosure strategy via DRC-03, departmental audit representation under §65/§66, and appeals before the Appellate Authority and GSTAT. Fast turnaround for time-bound notices. Pan-India, 100% digital.
Disclaimer: Educational purposes only. Based on CGST Act 2017 (§61, §65, §66, §67, §73, §74, §74A inserted by Finance (No.2) Act 2024, §75(2), §107, §109-113, §112, §117, §118, §122, §129, §138, §171), CGST Rules 2017 (Rule 88C, Rule 88D, Rule 142(1A)), CBIC Instruction dated 13 December 2023, CBIC Circular No. 254/11/2025-GST dated 27 October 2025, GST Council notifications on GSTAT and anti-profiteering transition (notification dated 30 September 2024), as available up to May 2026. Allahabad High Court rulings (Safecon Lifescience, September 2025; Raghuvansh Agro Farms, 17 December 2025) and GSTAT rulings (Sterling & Wilson vs Commissioner Odisha; DG Anti-Profiteering vs C.G. Foods, TS-56-GSTAT(DEL)-2026-GST, 3 February 2026) cited for illustrative legal principles only – facts of your matter may differ. GSTAT bench rollout status and appeal timelines are evolving; verify current position on the GSTAT portal before relying on specific deadlines. Anti-profiteering revival under GST 2.0 was under discussion as of the 56th GST Council meeting (September 2025) and not confirmed as notified policy as of May 2026. Consult a qualified GST practitioner for matter-specific advice.
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