A GST show cause notice (SCN) is not a demand. It is a notice asking why action should not be taken against you, and it gives you a chance to explain before an order is passed. A good reply can end the matter at this stage. A poor or missing reply often leads to an order that has to be appealed.

What is in a show cause notice?

  • The provision of the law under which it is issued
  • The period covered and the amount of tax, interest and penalty proposed
  • The facts and the reasons the officer relies on
  • The date by which you must reply, and the date of any personal hearing

Steps to take when you receive one

  1. Note the reply date. Missing it can lead to an order made without hearing you.
  2. Read the allegations line by line. Check the figures against your returns and books.
  3. Collect documents. Invoices, returns, reconciliations, e-way bills and correspondence.
  4. Consider whether to pay. In some cases paying the tax admitted, with interest, can reduce or avoid penalty. Payment is made through the prescribed form. Pay only what you agree is due, and note that you are paying under protest where that applies.
  5. File your reply. The reply is submitted on the GST portal, with a request for a personal hearing.
  6. Attend the hearing and follow up in writing.

What a good reply includes

  • A short statement of facts, and any legal objection to the notice, such as that it is vague or that the limitation period has expired
  • A point-by-point response to each allegation
  • Supporting documents, indexed and referred to in the reply
  • A request to be heard before any order is passed

If an order is passed against you

You can appeal. The first appeal must generally be filed within three months of the order being communicated to you, and a pre-deposit is required. Read our full guide to the GST appeal process.

Frequently Asked Questions

Is a show cause notice the same as a demand?

No. It is a notice proposing action. A demand arises only when an order is passed after considering your reply. That is why replying properly matters.

What if I do not reply to the notice?

The officer can pass an order on the material available, without your explanation. That order can then be appealed, but it is much better to reply on time.

Should I pay the tax mentioned in the notice?

Not automatically. Check the calculation first. Sometimes paying what is clearly due helps, but paying without reading the notice can weaken your position. Talk to us before deciding.

This page is general information and not legal advice. Time limits, forms and fees change, and the law that applies depends on your facts and the year involved. Please contact us so we can check the current position for your case.