What is GSTR-3B and when is it due?

GSTR-3B is a monthly self-declared summary GST return. For regular taxpayers, it is due by the 20th of the following month. Late filing attracts ₹50/day late fee (₹25 CGST + ₹25 SGST), capped at ₹5,000.

How do I reply to a DRC-01 GST notice?

DRC-01 is a show-cause notice for tax demand. Log in to GST portal, go to Services > User Services > View Additional Notices, select the notice and file a reply within 30 days — either agreeing and paying, or disputing with supporting documents.

What is the late fee for filing GSTR-1 late?

Late fee for GSTR-1 is ₹50/day (₹25 CGST + ₹25 SGST). For nil returns it is ₹20/day. Maximum cap is ₹10,000 per return. GSTR-1 is due by the 11th of each month for monthly filers.

Can I claim ITC on hotel and restaurant bills?

ITC on restaurant food and beverages is blocked under Section 17(5) CGST Act — not claimable. However, ITC on hotel accommodation is allowed if used for business purposes and the hotel provides a GST invoice with your GSTIN.

What is the GST registration threshold in India?

GST registration is mandatory if annual aggregate turnover exceeds ₹40 lakhs for goods (₹20 lakhs for special category states) or ₹20 lakhs for services (₹10 lakhs for special category states). E-commerce sellers must register regardless of turnover.

DRC-01 Show Cause Notice: How to Respond and Protect Yourself

sai krishna
Jun 7
2 min read

Form GST DRC-01 is the Show Cause Notice (SCN) issued under Rule 142(1) of the CGST Rules. It is issued when the proper officer has reason to believe that tax has been short-paid, not paid, excess ITC has been claimed, or excess refund has been granted.

What Triggers a DRC-01?

- No reply to ASMT-10 scrutiny notice - Unsatisfactory reply to ASMT-10 - Post-audit findings under Section 65 or 66 - Investigation under Section 67 (search/seizure) - Ex-parte assessment after no ASMT-11 reply

Structure of DRC-01

A DRC-01 has these key components: 1. Noticee details (name, GSTIN, address) 2. Statement of facts (basis of demand) 3. Tax demand table (CGST/SGST/IGST/Cess + interest + penalty) 4. Legal grounds (section and rule) 5. Direction to reply within 30 days 6. Personal hearing offer

Time Limit to Reply

You have 30 days from service of DRC-01 to file your reply. You can also request a personal hearing before the adjudicating authority.

Options Available to You

Option 1: Agree fully — Pay the full tax, interest, and penalty (reduced to 15% if paid before order) under DRC-03. File reply acknowledging payment.

Option 2: Agree partially — Pay the admitted portion under DRC-03. Contest the balance with legal arguments and documents.

Option 3: Disagree fully — File a detailed reply contesting the entire demand with legal grounds, precedents, and supporting documents.

How to File Your Reply

1. Draft the reply addressing each paragraph of DRC-01 2. Attach supporting documents (invoices, reconciliation, GSTR downloads) 3. Cite relevant sections, rules, and court judgments 4. File in Form GST APL-01 on the GST portal if you plan to appeal after adjudication 5. Request personal hearing in writing

What Happens After Your Reply?

The adjudicating officer issues a speaking order (DRC-07) within 3 years from the due date of annual return (Section 73) or 5 years (Section 74/74A for fraud cases). If the order goes against you, you can appeal to the First Appellate Authority (FAA) within 3 months, and further to the GST Appellate Tribunal, High Court, or Supreme Court.

Penalty Reduction

If you pay before SCN: No penalty (Section 73(5)) If you pay after SCN but before order: 15% of tax If you pay after order: 25% of tax within 30 days of order If you pay after appeal order: 50% of tax

Disclaimer: Consult your CA or GST practitioner for your specific case.