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A GST show-cause notice proposes liability and asks the business to explain why it should not be imposed. A demand is the liability determined by the proper officer in an adjudication order. The notice is not, by itself, a final finding that tax is payable—but it can start a time-sensitive process, so identify the document, its legal basis and its reply deadline promptly.
What is the difference between a GST show-cause notice and a demand?
| Question | Show-cause notice | Demand or adjudication order |
|---|---|---|
| What stage is it? | The officer proposes liability and gives the recipient an opportunity to respond. | The officer determines liability after considering the case and the recipient’s representation. |
| What should you check? | The allegations, tax period, legal provision, proposed calculation, attachments and reply deadline. | The findings and reasons, amount determined, order date, order summary, and appeal or recovery consequences. |
| Relevant form under the cited Rule 142 text | FORM GST DRC-01 is an electronic summary associated with specified notices. FORM GST DRC-06 is the reply form where the rule’s DRC-01 procedure applies. | FORM GST DRC-07 is an order summary; Rule 142 says it is treated as a notice for recovery. |
| Immediate focus | Prepare a supported, timely response and preserve submission records. | Assess appeal, payment and recovery implications under the law applicable to the case. |
These form descriptions follow Rule 142 in the CBIC Rules compilation dated 2022, accessed on 4 October 2026. The notice and order themselves matter; a form summary does not replace reading the underlying document and attachments. Check for later amendments before relying on a form or procedure in a filing.
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How to identify which GST communication you received
Do not assume every GST portal communication is a demand order. Read the full document and any annexures, then identify its issuer, statutory section, tax period, allegations and stated purpose. Determine whether it is an intimation, show-cause notice, statement, adjudication order or recovery communication. Note the date and method of service, and keep the portal record, email or envelope with the document.
Rule 142 also refers to other forms in the process. In the cited text, DRC-02 is a summary of a statement under the referenced provisions; DRC-01A may be used for a pre-notice communication; DRC-03 is used to report payment; DRC-04 acknowledges payment; and DRC-05 records conclusion in the stated payment circumstances. These forms do not all mean that a final demand has been adjudicated. Their effect depends on the applicable rule and the actual communication.
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Which legal provision and allegation should you check?
The version of the CGST Act text on the CBIC page accessed on 4 October 2026 describes section 73 as covering tax unpaid or short-paid, erroneous refunds, or input tax credit wrongly availed or utilised for reasons other than fraud, wilful misstatement or suppression to evade tax. Its section 74 text addresses such matters where those specified fraud or evasion grounds are alleged. The allegation matters: check whether the notice states the conduct and facts it relies on, rather than inferring the basis from the amount claimed.
Do not assume sections 73 and 74 are the only possible provisions for every period. Section 74A and later amendments may affect which provision applies. The CBIC page noted above is not a reliable consolidated text of every later amendment. Verify the current official legislation, commencement provisions and transitional treatment for the particular tax period before applying older section 73 or 74 language, calculating a limitation period or choosing a response strategy.
What to verify in the proposed tax calculation
Reconcile the notice with your business records before accepting or disputing its figures. Check the period and transactions identified, the tax calculation, interest and any proposed penalty. Compare the allegations against the relevant returns, invoices, input-tax-credit records, ledgers, payment challans and prior correspondence. The documents needed will depend on the allegation; this is a practical checklist, not an exhaustive legal evidence list.
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- For each disputed point, identify the relevant record and explain how it relates to the allegation.
- Check whether the notice’s stated grounds and proposed amount match its supporting details.
- Keep copies of the notice, attachments, calculations, records relied on and any earlier submissions.
How to reply to a GST show-cause notice
- Preserve the communication. Save the notice, annexures, service record and portal summaries. Record the date received and the response deadline stated in the notice.
- Classify the document. Note the issuer, statutory provision, tax period and allegation. Confirm whether you have a notice, statement, order or recovery communication.
- Reconcile the figures. Compare the proposed tax, interest and penalty with the relevant returns, invoices, credit records, payment evidence and prior correspondence.
- Prepare a point-by-point response. Address each allegation and connect your explanation to supporting records. Where the DRC-01 summary procedure applies, Rule 142 identifies DRC-06 as the reply form. Keep the submitted response and proof of filing.
- Consider a written hearing request. The section 75(4) text on the CBIC Act page says an opportunity of hearing is to be granted where requested in writing by the person chargeable with tax or penalty, or where an adverse decision is contemplated. Confirm the current applicable text and make any request appropriate to the case.
There is no safe universal reply deadline to apply from a general article. Follow the deadline in the actual notice and the governing provision, and get case-specific advice promptly if the deadline is unclear or near.
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What changes after an adjudication order?
An order is a different procedural stage from the notice that preceded it. Read the findings and reasons, the amount determined, the order date and any DRC-07 summary. Under the cited Rule 142 text, DRC-07 is treated as a notice for recovery. If an order has issued, promptly check the applicable appeal route, limitation, any pre-deposit requirement and payment or recovery consequences against current law. A response to the earlier notice does not replace those steps.
The section 75 text on the CBIC Act page also says an order is to set out relevant facts and the basis for the decision, and is not to demand more than the amount or rely on grounds beyond those specified in the notice. Because the page may not reflect every later amendment, verify the text applicable to the case before relying on these protections in a filing or appeal.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does the older section 128A relief date still apply?
CBIC Circular 238/32/2024-GST describes section 128A relief for specified section 73 demands relating to FY 2017–18 through FY 2019–20 and gives 31 March 2025 as the notified payment date. That date has passed. Do not treat it as an open payment window or assume relief remains available; check for any later official change and confirm whether the provision applies to the specific demand.
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