Navigating and Responding to GST Notices: Your Guide to Replying with DRC-06 on the GST Portal
This guide provides a comprehensive overview of how to manage and respond to GST demand notices, specifically Form DRC-06, through the official GST Portal. It details the reasons for notice issuance under Sections 73 and 74, outlines the adjudication process, and explains the time limits for case resolution. Furthermore, the article offers step-by-step instructions on viewing notices and submitting replies online, ensuring taxpayers can effectively address tax department inquiries.
Under the GST regime, taxpayers are expected to self-assess and pay their taxes. However, if this self-assessment is found to be incorrect, the tax department is authorized to issue a notice. These notices can be triggered by various reasons, including short payment or non-payment of taxes, erroneously claimed refunds, or incorrect utilization of Input Tax Credit (ITC). Such notices are primarily issued under two specific sections of the GST Act:
- Section 73: This section addresses situations where tax has been short-paid, not paid, incorrectly refunded, or ITC has been wrongfully availed or utilized for reasons other than fraud, deliberate misstatement, or suppression of facts.
- Section 74: This section covers similar situations but specifically applies when these discrepancies arise due to fraud, willful misstatement, or the suppression of facts.
Overview of the Adjudication Process
The department issues a notice under Section 73 or 74, along with an electronic summary in Form DRC-01. If the notice pertains to a specific period, the proper officer may also issue a statement detailing the amount payable in Form DRC-02. Taxpayers have distinct courses of action available before and after receiving a Show Cause Notice (SCN), as summarized below:
| Section | Tax, Interest, and Penalty | Action by Taxpayer | Action by Authority |
|---|---|---|---|
| Voluntary payment before issuance of SCN | |||
| Under Section 73 | Tax + Interest | Intimate the Department about voluntary payment in Form DRC-03. | The proper officer will issue an acknowledgment (Form GST DRC–04) accepting the payment. If satisfied, no notice will be issued. |
| Under Section 74 | Tax + Interest + Penalty @ 15% of tax | ||
| Payment within 30 days of issue of SCN | |||
| Under Section 73 | Tax + Interest | Intimate the Department about voluntary payment in Form DRC-03. | If the Authority is satisfied with the reply, proceedings will be dropped via an order in Form DRC-05. Otherwise, a Notice of personal hearing will be issued. |
| Under Section 74 | Tax + Interest + Penalty @ 25% of tax | ||
| Payment after 30 days of issue of SCN but within stipulated time mentioned in SCN | |||
| Under Section 73 | Tax + Interest + Penalty @ 10% of tax or Rs. 10,000 whichever is higher | Reply to the SCN in Form DRC-06 and submit supporting documents. | If the Authority is satisfied with the reply, proceedings will be dropped via Form DRC-05. Otherwise, a Notice of personal hearing will be issued. |
| Under Section 74 | Tax + Interest + Penalty @ 50% of tax |
Time Limits for Adjudicating a Case under Section 73 and Section 74
There are specific timeframes within which cases under these sections must be adjudicated:
- Section 73: The time limit for adjudicating a case is 3 years from the due date of filing the Annual Return related to the demand, or the date of an erroneous refund.
- Section 74: The time limit for adjudicating a case is 5 years from the due date of filing the Annual Return related to the demand, or the date of an erroneous refund.
How to View a Notice on the GST Portal
To view any notices issued to you by the tax authorities on the GST Portal, follow these steps:
Step 1: Log in to the GST Portal. Step 2: Navigate to Services > User Services > View Additional Notices/Orders > Case Details. Step 3: After clicking "View additional notices," you will see a list of all notices and orders issued by the Department. Click "View" to access the specific Case Details. Step 4: To view the actual notice document, click on the download link located within the attachments option.
How to Reply to a Notice (DRC-06) on the GST Portal
Once you have viewed the notice, you can proceed to submit your reply using Form DRC-06 on the GST Portal:
Step 1: On the Case Details page, click on the 'Replies' tab. Step 2: Select the 'Add Reply' tab and then choose 'Reply'. Step 3: Initially, the status of the reply will show 'Pending for reply by the taxpayer'. This status will change once you submit your response. Step 4: The reply page will then be displayed, prompting you to enter the necessary information. Step 5: The reply page will present several fields for completion:
| Fields | Nature |
|---|---|
| Type | These fields will be auto-populated. |
| SCN Ref No. | |
| Date of SCN | |
| Financial Year | |
| Personal hearing requirement | The taxpayer has to choose ‘Yes’ or ‘No’. This tab appears only if the Issuing Authority has not already called for a personal hearing in the issued notice. |
| Reply | Enter details of the reply. |
| Attachment | Select the necessary attachment. |
| Verification | Select the declaration check-box, the name of the authorized signatory, and place. |
Step 6: Click Preview to view the reply. If satisfied, click on 'File'. Step 7: The 'Submit Application' page will be displayed. A taxpayer can choose to file with DSC (Digital Signature Certificate) or EVC (Electronic Verification Code). a. File with DSC: Browse for your certificate and click the 'sign' button. b. File with EVC: An OTP (One-Time Password) will be sent to your registered mobile number and email ID. Upon validating the OTP, a success message will be received, along with an ARN (Application Reference Number). Step 8: The Notices and Orders page will be displayed. Click on the link to download the filed reply, and then click 'Ok'. Step 9: The Case Details page will update, and the status of your reply will change to 'Reply furnished, pending for order by tax official.'
How to View an Order Issued by a Tax Official
To view orders issued by a tax official against your case, follow these steps:
Step 1: Click on the 'Orders' tab within the case details page. Step 2: All orders issued concerning the taxpayer will be displayed here. Step 3: Click on the link under the attachments section to view the specific order document.
Frequently Asked Questions
- After an order is issued, is a separate recovery notice also issued? No, the order itself serves as the recovery notice.
- How are payments of tax, interest, and penalty made before a notice, and which form is used? You can find more information about making such payments before a notice is issued in Form DRC-03.
- What are the different modes of recovery under GST? Details on the various recovery modes under GST can be found in the Demands and Recovery procedure.
- Can a GST order be rectified? Yes, any apparent mistakes on the record can be rectified within 6 months from the order's issue date. This rectification is performed by a proper officer using Form DRC-08.
- Is it possible to pay tax dues in installments? Yes, tax payments can be made in installments. Further details are available here.