Section 73 GST Notice Reply
A Section 73 notice is a Show Cause Notice for unpaid or underpaid tax where fraud is not alleged. Responding correctly — and quickly — can reduce your penalty to zero.
What Is a Section 73 Notice?
Section 73 of the CGST Act deals with determination of tax not paid, short paid, erroneously refunded, or ITC wrongly availed — in cases where there is no allegation of fraud, suppression, or wilful misstatement. The officer issues a Show Cause Notice (SCN) asking why the tax demand should not be confirmed.
What Are You Liable For?
Tax + Interest
The unpaid tax amount plus interest at 18% per annum from the due date until the date of payment.
Penalty
10% of the tax amount or ₹10,000, whichever is higher — but this can be reduced to NIL if you pay before the SCN order is issued.
The Key Window: How to Reduce Penalty to Zero
Response Deadline
30 days from the date of service of the SCN to file a reply. The adjudicating officer will then issue an order within 3 years from the due date of the annual return for the financial year in which the tax was not paid.
Documents You Will Need
- The SCN (DRC-01) you received.
- GSTR-1, GSTR-3B, and GSTR-2A/2B for the disputed period.
- Working of tax calculation showing your basis of computation.
- Tax invoices supporting your position.
- Payment challan (DRC-03) if you have already paid the disputed amount.
- Written explanation addressing each point raised in the notice.
How to File Your Reply
Reply to a Section 73 SCN using Form GST DRC-06 on the GST portal. Log in, navigate to Services > User Services > View Additional Notices and Orders, select the relevant notice, and click Reply.
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