What is a Show Cause Notice?
Show Cause Notice (SCN) is a warning or notification issued by a Courts, Competent Authorities or an Organization for an identified default demanding a tax payer to explain or to "show cause" in writing as to why the disciplinary/penal action should not be taken against the taxpayer for the identified defaults.
Show cause notice is the first obligatory communication served on the dealer proposing any demand under GST Act 2017, other than payment of interest under section 50 and non filing of returns under section 62 of the GST Act. The issue on SCNs need not necessarily conclude in demand for taxes.
Why is Show Cause Notice Issued?
- Non filing of GSTR 3B and GSTR 1 for a period beyond six months
- Mismatch in GSTR 1 and GSTR 3B.
- An individual who is liable to be registered under the Act has failed to register.
- Short payment or non payment of GST Liability.
- Mismatch in GSTR 1 and E way Bill.
- Mismatch of ITC.
- Excess claim of refund
- Anti Profiteering
- Failed to respond within the time limit.
- E invoicing and e waybill mismatch.
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Showcase notices shall be issued for the following
|
SL No |
Notice |
Action |
|
1. |
REG 03 - Notice related to registration |
To be replied within 7 working days |
|
2. |
REG 23 - Notice for Revocation or cancellation of registration. |
To be replied within 7 working days |
|
3. |
GSTR 3A- Notice for non filing of GST Returns |
GST Returns to be filed within 15 days for the months defaulted. |
|
4. |
CMP 05- Notice to be a ineligible Composition dealer |
Reply within 15 days |
|
5. |
RFD 8- Notice for rejection of GST refund. |
Reply within 15 days |
|
6. |
ADT 1 - Notice for conducting Audit u/s 65 |
To be replied within the stipulated time of the notice. |
|
7. |
DRC 1- Notice for tax demand |
To be replied within 30 days. |
|
8. |
DRC 10 - Notice for Auction of Goods |
To be replied as per the Notice. |
Show Cause Notice Under Section 76
Taxes earned but not paid to the government serve as the subject of Section 76. If any amount due to the government is not paid, the Proper Officer may issue a GST show-cause notice to the registered taxpayer who is obligated to pay the amount, mandating them to show cause why the specified amount was not paid.
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2 Days Certificate Course on "How to Handle Show Cause Notices in GST" with CAclubindia. Avail Pre-Independence Day Offer!! Click here to register now
Show Cause Notice Under Section 73
For any reason other than fraud or deliberate misstatement or suppression of facts, Section 73 pertains to the identification of tax which is not paid, underpaid, or erroneously returned, or input credit claims in excess.
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