—Guide
GST Show-cause Notices Explained: ASMT-10, DRC-01A and DRC-01
What ASMT-10, DRC-01A and DRC-01 mean, how the GST demand process works, and how to respond at each stage to limit tax, interest and penalty.
GST notices escalate in stages: a scrutiny query, then an intimation, then a formal show-cause notice, then an order. Each stage is an opportunity to resolve the matter — and responding well early is usually far cheaper than fighting later. This guide explains the stages.
ASMT-10: Scrutiny of Returns
Under Section 61, the officer scrutinises returns and issues ASMT-10 listing discrepancies — typically mismatches between GSTR-1, GSTR-3B, GSTR-2B and the annual return. You reply in ASMT-11, explaining the differences or paying what's genuinely due. A satisfactory reply closes the matter.
DRC-01A: Intimation Before a Show-cause Notice
Before issuing a show-cause notice, the officer may intimate the tax, interest and penalty proposed, in DRC-01A. You can pay the amount — often with reduced or no penalty at this stage — or submit reasons why it isn't payable.
DRC-01: The Show-cause Notice
The formal show-cause notice sets out the demand and its grounds. It must be issued within the time limits in the law.
- For demands relating to earlier years, separate provisions applied to cases involving fraud, wilful misstatement or suppression, and to other cases, with longer time limits and higher penalties where fraud was alleged.
- From FY 2024-25, a single provision covers both types, with a common time limit, and penalties still depending on whether fraud or suppression is involved.
Paying at the Right Time
The law rewards early payment. In non-fraud cases, paying tax and interest within the time allowed after the show-cause notice can mean no penalty. In fraud cases, penalties are reduced when payment is made at earlier stages.
Replying to a Show-cause Notice
- Check the notice is within the time limit.
- Reconcile the figures independently.
- Reply point by point, with legal grounds and evidence.
- Ask for a personal hearing.
- Attend the hearing, or authorise a representative.
The Order
After considering the reply, the officer passes an order in DRC-07. If you disagree, you can appeal within the time allowed.
Getting Help
Think Filing replies to GST scrutiny notices and show-cause notices, and represents businesses at hearings.