GST notice reply format 2026: ASMT-10, DRC-01A and DRC-01 replies that hold up

GST notices used to be random. They are now systemic. Scrutiny cases are picked by DGARM on risk parameters and pushed to officers’ dashboards, DRC-01B and DRC-01C intimations are generated by the portal itself, and Section 74A has put every tax period from FY 2024-25 on a single 42-month clock. A CA office with 80 GST clients should expect notices every month, not every year.

The reply decides where a case ends. A precise ASMT-11 ends at ASMT-12. A vague one becomes a DRC-01, then a DRC-07, then an appeal with a 10 percent pre-deposit.

Which notice is which

All of these appear under Services, User Services, View Notices and Orders on the portal. GSTN has merged the old Additional Notices and Orders tab into Notices and Orders, so anyone still checking only the old tab is missing notices.

What each notice is actually saying

ASMT-10: explain these numbers

ASMT-10 is not a demand. It is the officer saying the returns do not reconcile and asking why. Under CBIC’s scrutiny SOP, Instruction 02/2023, GSTINs are selected by DGARM on risk parameters, and the officer is expected to quantify the discrepancy, issue one compiled notice for the whole financial year, and rely on system data rather than calling for records. The usual parameters: ITC in 3B above 2B, GSTR-1 liability above 3B, e-way bill values above GSTR-1, RCM not discharged, and ITC from suppliers whose registration was cancelled.

You have two choices in ASMT-11: accept the discrepancy, pay through DRC-03 and say so, or explain it with evidence. The SOP gives the officer 30 days from your reply to either close the case in ASMT-12 or initiate proceedings under Section 73 or 74. If you do not reply at all, action can begin 15 days after your 30 days run out (portal steps).

DRC-01A: pay now at a discount, or tell me why not

Part A is the officer’s intimation of the amount they intend to demand, issued before a show cause notice under Rule 142(1A). The word in the rule is “may”, so not every SCN is preceded by one. If you agree, pay through DRC-03 before the notice issues. Under Section 74A(8) a non-fraud demand paid before notice carries no penalty; under Section 74A(9) a fraud-category demand paid before notice carries 15 percent, rising to 25 percent within 60 days of the notice and 50 percent within 60 days of the order (Section 74A text).

If you disagree, Part B is where you say so. Rule 142(2A) lets you file submissions against the proposed liability, and the officer may respond in Part C. Courts have held that the DRC-01A stage does not create a right to a pre-notice hearing (Rule 142 guide), so treat Part B as your one chance to shrink the SCN before it is drafted, not as the main contest.

DRC-01: the show cause notice

DRC-01 is the summary of the SCN under Section 73 (non-fraud), Section 74 (fraud, wilful misstatement, suppression) or, for FY 2024-25 onwards, Section 74A, which merges both into one section with a 42-month limit for the notice from the annual return due date and a 12-month limit for the order, extendable by six months. For older years, Section 73 requires the notice at least three months before the three-year order deadline and Section 74 at least six months before the five-year deadline (Section 73 explainer).

The reply is DRC-06. Always opt for a personal hearing. Section 75(4) makes a hearing mandatory where an adverse order is contemplated, and High Courts have set aside DRC-07 orders passed without one even where the taxpayer had declined the hearing on the form (Gujarat HC in Aarya Metals).

DRC-07: the order

DRC-07 is the summary of the adjudication order. The demand sits in your electronic liability ledger from that day. There is no reply; the route is an appeal in APL-01 within three months, with a pre-deposit of 10 percent of the disputed tax (Section 107 pre-deposit).

The timelines that decide the outcome

• 7 days for DRC-01B and DRC-01C. Miss the DRC-01B reply and the next GSTR-1 can be blocked.
• 30 days for ASMT-11, extendable on request. Ask for the extension in writing before day 30, not after.
• 60 days from the SCN under Section 74A to pay with nil penalty (non-fraud) or 25 percent (fraud). This is the most valuable date on a Section 74A notice.

Structure of a reply that holds up

The replies that work make the officer’s job easy: each discrepancy, its explanation, its evidence, and the amount that remains, in that order. Here is the skeleton we use for ASMT-11 and DRC-06; square brackets are placeholders.

To: [Designation], [Jurisdiction / Range / Division]
Ref: Notice [Form no.] Ref No. [ARN or DIN], dated [date]
GSTIN: [15-digit GSTIN]   Legal name: [Name]   Period: [FY / tax periods]
Subject: Reply to [Form no.], [one-line description of the discrepancy]

1. Preliminary (establishes that the reply is in time)
   - Notice received on [date of service]. Reply within time, or under the
     extension granted on [date]. Authorisation enclosed (Annexure A).

2. Facts in brief (5 to 8 lines)
   - Business, registrations, returns filed; what the notice alleges, parameter
     by parameter, using the officer's own figures.

3. Point-wise reply (one sub-head per discrepancy, numbered as in the notice)
   3.1 [Parameter 1: ITC in 3B Rs [x] vs 2B Rs [y]; difference Rs [z]]
       Explanation: [why the difference exists: timing, IMS pending, RCM, import
       ITC not in 2B, ISD, reversal already made in Table 4(B)].
       Reconciliation: Annexure B, invoice-level, totals tie to the notice figure.
       Amount accepted, if any: Rs [a], paid via DRC-03 ARN [no.] dated [date].
       Amount contested: Rs [z minus a]. Legal basis: [section / rule / circular].
   3.2 [Parameter 2 ...]

4. Legal submissions (short): provisions and circulars with paragraph numbers;
   case law only where directly on point, with court, name and date.

5. Prayer
   - Drop proceedings and issue ASMT-12 for parameters [list].
   - For contested amounts: grant personal hearing under section 75(4) before any order.

Annexures: A. Authorisation  B. Reconciliation  C. DRC-03 challans
           D. Invoices and e-way bills  E. Ledger extracts
Place, date, signature, name, designation

Three things make this work: the point-wise section mirrors the notice’s own parameter numbering, every figure ties to an annexure whose totals tie to the notice, and the accepted amount is separated from the contested amount, which lets the officer close part of the case in ASMT-12 instead of escalating all of it.

Common mistakes

• Replying to the wrong form. A DRC-01A Part B argument pasted into a DRC-06 without the SCN’s paragraph references reads as a non-reply.
• Narrative without reconciliation. “The difference is due to timing” with no invoice-level annexure. Timing explains most 2B differences, and it is only believed when shown.
• Ignoring the accepted part. If ₹40,000 of a ₹4 lakh difference is genuinely wrong, pay it via DRC-03 inside the reply window. It costs nothing in penalty under Section 74A(8) and makes the rest of the reply credible.
• Letting the 7-day DRC-01C window lapse because the intimation went to an email nobody reads. Reply even if the reply is one line: ITC pertains to imports, details in Annexure.
• Missing the limitation point. If an SCN for FY 2024-25 arrives after the 42-month window, say so first, before the merits.
• Filing without a record. Keep the ARN, the reply PDF and the annexures in the client folder. The next notice will reference this one.

Classifying and drafting at scale

For a firm with 50 to 100 GST clients, the problem is not writing one good reply. It is knowing, on any given morning, which clients have which notices, how many days are left, and what data each reply needs. The process that works:

1. Intake. Every notice is pulled from the portal daily, through an authorised GSP connection with the client’s consent, and logged with form type, period, amount and due date.
2. Classify. Form type plus parameter decides the track. DRC-01C on a 2B difference goes to the reconciliation team; DRC-01B to the returns team; DRC-01 under Section 74 to a partner on day one.
3. Pull the data. For a 2B versus 3B parameter: GSTR-2B, GSTR-3B Table 4, the purchase register and the IMS action log. Most of this already exists if monthly GSTR-2B reconciliation is running, and IMS accept, reject and pending decisions are now the first thing an officer asks about on an ITC parameter.
4. Draft. The skeleton above, populated with the notice’s figures, the reconciliation totals and the standard explanation for each mismatch bucket. A draft, not a reply.
5. Review and sign. A CA reads the draft against the notice, changes the legal position where needed, and signs.
6. File and track. ARN logged, hearing date on the calendar, the officer’s 30-day clock noted so a silent file is followed up.

Steps 1 to 4 and 6 run without anyone opening the portal; step 5 receives a draft that is most of the way done. The pipeline is on our accounting automation page, and notice classification and draft generation run on sample notices in the accounting demo.

What to automate

• Notice intake and deadline tracking across all client GSTINs, with the 7, 30 and 60-day clocks computed from the service date.
• Classification by form type and parameter, routed to the right team with the right data pack attached.
• Reconciliation annexures generated from GSTR-2B, GSTR-3B, GSTR-1 and the purchase register, invoice-level, tied to the notice figures.
• First drafts of ASMT-11 and DRC-06 in the skeleton above, with standard explanations per mismatch bucket.
• Post-filing follow-up: ARN capture, hearing reminders, and a nudge when the officer’s 30-day window passes without an ASMT-12.