If your business operates in Pune—whether manufacturing precision components in Chakan and Bhosari, delivering software services in Hinjewadi, or running retail operations in Hadapsar—receiving a GST notice is no longer an anomaly. The GST portal now deploys automated algorithms that compare GSTR-1, GSTR-3B, GSTR-2B, e-Way bills, and income-tax TDS data in real time. Discrepancies that once went unnoticed now trigger algorithmic scrutiny flags within 30 days of filing. Over the past several quarters, our practice has represented dozens of Pune entities before state and central GST authorities. Below are the 5 notices we see most frequently, the factual triggers behind them, and the systematic approach we take to resolve them before they escalate into formal demands.
1. Form GST ASMT-10: Scrutiny of Returns Under Section 61
Form GST ASMT-10 is by far the most frequent communication Pune businesses receive. Issued under Section 61 of the CGST/MGST Act, it is an intimation of discrepancies noticed during departmental scrutiny. The officer is not yet demanding tax with a penalty; they are asking you to explain why figures in your filed returns do not reconcile.
✓GSTR-3B vs GSTR-2B Mismatches: The taxpayer claimed higher Input Tax Credit in Table 4 of GSTR-3B than what appears in auto-populated GSTR-2B.
✓GSTR-1 vs GSTR-3B Variance: Outward taxable turnover reported in GSTR-1 is higher than the tax paid in GSTR-3B, often caused by late-month invoices or data entry errors.
✓e-Way Bill Turnover Discrepancy: The total value of e-Way bills generated exceeds outward supplies declared in GSTR-1 for the corresponding tax period.
✓TDS/TCS Reconciliation Flags: Mismatch between turnover reflected in GST filings and Section 194C / 194J income-tax TDS credits.
How We Respond: Never reply with a generic statement that 'all taxes were paid correctly.' The proper procedure is filing Form GST ASMT-11 within 30 days. We extract invoice-level GSTR-2B data, isolate missing vendor filings, obtain vendor payment proof, and present a mathematically cross-referenced reconciliation sheet. If the explanation satisfies the proper officer, an order dropping the proceedings is issued in Form GST ASMT-12.
2. Form DRC-01A and DRC-01: Summary of Show Cause Notice
When an ASMT-10 goes unanswered, or when audit cells identify alleged short payments, the department issues Form DRC-01A (pre-notice intimation under Section 73(5) or 74(5)) followed by Form DRC-01 (formal Show Cause Notice). This is a high-stakes notice proposing tax recovery, interest under Section 50, and mandatory penalties.
✓Section 73 vs Section 74 Distinction: Section 73 applies to cases not involving fraud or willful misstatement (penalty is lower, capped at 10% of tax). Section 74 alleges fraud or suppression of facts, carrying 100% penalty.
✓Ineligible ITC Claims: Department alleges ITC was availed on blocked categories under Section 17(5) such as personal use, club memberships, or motor vehicles.
✓Cancelled Supplier Registrations: Department flags ITC availed from suppliers whose GST registrations were subsequently cancelled retrospectively.
How We Respond: At the DRC-01A stage, we evaluate whether paying admitted tax with concessional interest saves costs. If the demand is contested under Section 73/74, we draft a detailed legal submission in Form DRC-06 backed by Supreme Court and High Court precedents, bank clearance records, and transport proofs (bilty) demonstrating bona fide purchase transactions.
3. Form GST REG-17: Show Cause Notice for Registration Cancellation
A REG-17 notice threatens the operational lifeline of any business: unilateral cancellation of GST registration. In Pune's competitive commercial landscape, registration suspension immediately halts outward sales, e-Way bill generation, and banking credit lines.
✓Non-filing of Returns: Failure to file GSTR-3B for consecutive tax periods (typically 6 months under normal scheme or 2 quarters under QRMP scheme).
✓Failed Physical Verification: Jurisdictional ward officers visit the registered address and find the premises closed, unbranded, or absent of statutory nameboards.
✓Rule 86B Violations: Entities with taxable turnover exceeding ₹50 Lakhs in a month who discharge over 99% of liability through electronic credit ledger without meeting statutory exemptions.
How We Respond: A response in Form GST REG-18 must be submitted within 7 working days. We file all pending returns with applicable late fees, compile municipal tax receipts, electricity bills, and lease deeds, and arrange immediate physical inspection verification to secure a revocation order in Form GST REG-20.
4. Rule 37 & 180-Day Supplier Payment Reversal Notices
Under the second proviso to Section 16(2) of the CGST Act, a recipient must pay their vendor the value of supply plus GST within 180 days from the invoice date. If unpaid, the recipient must reverse the availed ITC along with penal interest under Section 50. In Pune's manufacturing and contracting sectors, where credit cycles often stretch to 90–120 days or dispute deductions occur, the department frequently flags this discrepancy through audit reconciliations.
✓Aged Creditor Ledgers: Scrutiny officers cross-check Balance Sheet Sundry Creditors aging schedules against claimed ITC.
✓Retention Money Disputes: Deductions made for defect-liability periods in engineering and construction contracts trigger automated 180-day queries.
✓Inter-company Adjustments: Book adjustments between related entities without documented reciprocal consideration proof.
5. Section 70 Summons and Inverted Duty Scrutiny
For Pune precision manufacturers, job workers, and auto-ancillary units in the MIDC corridors, notices frequently relate to Section 70 summons or scrutiny of inverted duty structure refunds under Section 54(3). The department calls for raw purchase ledgers, bill of materials (BOM), and input-output coefficients to challenge refund eligibility.
What to Do in the First 48 Hours of Receiving Any GST Notice
1. Verify Document Identification Number (DIN) on the portal to confirm authenticity. 2. Docket the statutory reply deadline—never ignore an intimation. 3. Download the exact notices and all annexures from the 'View Additional Notices' tab. 4. Engage your CA to prepare a ledger-backed, legally grounded submission before speaking with the assessing officer.
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Frequently Asked Questions
Can an ASMT-10 notice be resolved without visiting the GST department?
Yes. Under the faceless scrutiny mechanism, ASMT-10 notices are answered digitally through Form GST ASMT-11 on the GST portal. A well-prepared reconciliation schedule supported by invoice listings and bank payment proofs is usually sufficient to obtain an ASMT-12 drop order without physical appearances.
What happens if a Pune business ignores a GST DRC-01 notice?
Ignoring Form DRC-01 results in an ex-parte demand order under Section 73 or Section 74 (Form DRC-07). Once DRC-07 is passed, recovery proceedings can freeze company bank accounts under Section 79 and initiate distress warrants against business assets.
How long does a business have to reply to a GST notice?
Deadlines depend on the notice type: ASMT-10 typically grants 30 days; DRC-01 grants 30 days; REG-17 grants 7 working days. If complex reconciliations require more time, an interim adjournment letter requesting an extension must be submitted before the deadline expires.
This article is intended for general informational purposes and should not be considered as professional tax, legal, or financial advice.
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