What Is Happening

The GST department has significantly increased the volume of scrutiny notices (ASMT-10) and pre-show-cause intimations (DRC-01) being issued to registered taxpayers across India in the current financial year. The primary triggers are:

Mismatch between GSTR-2B and GSTR-3B ITC claims
Discrepancy between GSTR-1 and GSTR-3B output tax
GSTR-9 vs monthly return aggregate mismatch
Unpaid Reverse Charge Mechanism (RCM) liability on freight, legal, and security services
E-way bill vs invoice value mismatch in manufacturing and trading businesses

Who Is Affected

Any GST-registered business that has filed returns for FY 2023-24 or FY 2024-25 may receive a notice if their return data flags a discrepancy in GSTN's automated scrutiny system. Manufacturing, trading, and construction businesses in Karnataka are seeing elevated notice volumes.

What You Must Do

Step 1 — Identify the notice type. ASMT-10 is a scrutiny query. DRC-01A is a pre-demand intimation with a voluntary payment option. DRC-01 is a formal demand. Each requires a different response.

Step 2 — Do not ignore it. Silence on a GST notice automatically converts to a confirmed demand, plus 18% interest and penalties of 10%–100% of tax depending on intent.

Step 3 — Reply through the GST portal under "Additional Notices and Orders" — not by email or post. Attach reconciliation statements and supporting invoices.

Step 4 — Pay admitted amounts before filing the reply. Paying undisputed tax + interest before the reply significantly improves outcomes.

Deadline

30 days from the date on the notice. Extensions can be requested but require prior approval from the adjudicating officer — do not assume extensions will be granted.

If you have received a GST notice and are unsure of the notice type or the reply strategy, contact your compliance advisor immediately. Do not wait until day 28.