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HIGH SEVERITYSection 73/74 • CGST Act, 2017

GST Show Cause Notice

A Show Cause Notice (SCN) in GST is issued when the department proposes to take action against you and gives you an opportunity to explain your position before passing an order.

Quick Answer

A GST Show Cause Notice asks you to explain why the proposed action (tax demand, penalty, cancellation) should not be taken against you. You must reply within 30 days.

⏰ Deadline: 30 days💰 Penalty: Depends on the section — from 10% (Section 73) to 100% (Section 74) of tax

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What is SCN Notice?

A Show Cause Notice (SCN) in GST is a formal communication from the tax authority giving you an opportunity to present your case before any adverse order is passed. This is a fundamental principle of natural justice — "no one shall be condemned unheard."

Types of SCN in GST: 1. Tax demand SCN (Section 73/74) — most common 2. Registration cancellation SCN (Section 29) 3. Penalty SCN (Section 122-127) 4. ITC reversal SCN (Section 16/17) 5. Assessment SCN (Section 62/63)

The SCN will specify: - What the department alleges - The legal provision violated - The proposed action (demand/penalty/cancellation) - Time given to reply (usually 30 days) - Option for personal hearing

Your reply to an SCN is crucial — a well-drafted reply can prevent demand orders, reduce penalties, and save your GST registration.

Why You Received SCN Notice

  • •Tax not paid or short paid
  • •Wrong ITC claimed
  • •Non-filing of returns for consecutive periods
  • •Discrepancies found during audit
  • •Third-party information about tax evasion
  • •GSTIN used for fake invoices (as per department)

How to Respond to SCN Notice — Step by Step

  1. 1Read the SCN carefully — note section, amount, and deadline
  2. 2Identify whether it's under Section 73 or 74
  3. 3Prepare point-by-point reply addressing each allegation
  4. 4Gather all supporting documents
  5. 5File reply within the stipulated time
  6. 6Request personal hearing if matter is complex
  7. 7Consider voluntary payment if liability is clear

Documents Required for SCN Reply

  • 📄Copy of the SCN with all annexures
  • 📄GST returns for relevant period
  • 📄Books of accounts
  • 📄Invoice copies (sales and purchases)
  • 📄Bank statements
  • 📄Any prior correspondence with department

Expert Tips for SCN Reply

✅Never ignore an SCN — silence is treated as acceptance
✅Address every single point raised in the notice
✅Be factual and professional — avoid emotional language
✅Cite relevant case laws and CBIC circulars
✅If you partially agree, pay that portion and contest the rest
✅Always keep proof of filing the reply

Frequently Asked Questions About SCN

What is a Show Cause Notice in GST?

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A Show Cause Notice (SCN) is a formal notice from the GST department asking you to explain why a proposed action (like tax demand or penalty) should not be taken against you. It gives you the right to be heard before any order is passed.

How many days to reply to GST SCN?

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Generally 30 days from the date of service of the notice. For registration cancellation SCN (REG-17), it's 7 working days. Always check the specific deadline mentioned in your notice.

What happens if I don't reply to GST SCN?

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If you don't reply, the officer will pass an ex-parte order (order without hearing your side) based on available records. This usually results in the full demand being confirmed with maximum penalty.

Can I get extension to reply to GST SCN?

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You can request an extension by writing to the proper officer explaining the reason for delay. There's no automatic right to extension, but officers generally grant reasonable time if you have valid reasons.

Related GST Notices

DRC-01high

GST Show Cause Notice (DRC-01)

Section 73high

GST Notice Under Section 73

Section 74critical

GST Notice Under Section 74 (Fraud)

REG-17high

GST Registration Cancellation Notice (REG-17)

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