10 GST Notices Every Business Owner in Chennai Should Recognise (And Fear the Right Amount)

Not every GST notice is a crisis, and treating a routine query with the same panic as a genuine demand often wastes the narrow window you actually have to respond well. Based on what businesses across Chennai and Tamil Nadu most frequently receive — and most frequently search for, in a panic, at 11pm — here are the ten notices worth knowing before one lands in your inbox.

1. GSTR-3A — Non-filer notice. Issued automatically when a GSTR-1 or GSTR-3B return is filed late or not filed at all. This is the mildest notice on this list — filing the pending return along with the late fee and interest usually resolves it without further escalation. Ignoring it repeatedly, however, is what eventually leads to registration cancellation.

2. ASMT-10 — Scrutiny notice. Issued under Section 61 when the department's system flags a discrepancy between your filed returns — most commonly a mismatch between GSTR-3B and GSTR-2B input tax credit. This is a query, not a demand: a well-documented reconciliation reply within 30 days frequently closes the matter entirely. Treated casually or ignored, it escalates into a formal show-cause notice. ITC mismatches are the single biggest cause of this notice — our ITC disputes guide covers the common causes and remedies in more depth.

3. DRC-01A — Pre-notice intimation. A relatively recent addition: before issuing a full show-cause notice, the department can send an intimation of the proposed liability, giving the taxpayer a chance to pay voluntarily or respond before formal proceedings begin. Responding at this stage, where the liability is genuine, is usually the cheapest way to resolve it — penalties escalate sharply once it converts into a full DRC-01.

4. DRC-01 — Show cause notice (demand). The formal demand notice for short-paid tax, wrongly claimed refunds, or excess input tax credit. For periods up to FY 2023-24, this was issued under Section 73 (non-fraud) or Section 74 (alleged fraud) — two provisions with very different penalty exposure. From FY 2024-25 onward, both have been merged into a single new provision, Section 74A, with a uniform 42-month limitation period; whether a case is treated as fraud or not is now decided during adjudication rather than fixed at the notice stage. This distinction matters enormously for how a reply should be drafted, and it's worth confirming which framework your specific notice falls under before responding. For the full picture on how a demand actually gets adjudicated — notice, hearing, and the order itself — see our GST demand, assessment and adjudication guide.

5. REG-17 — Show cause for registration cancellation. Issued when the department proposes to cancel your GST registration, most commonly for continuous non-filing or unexplained return discrepancies. This is more urgent than it looks: an active GSTIN is what allows your customers to claim input tax credit on your invoices, so even a threatened cancellation can quietly damage business relationships before it's finalised. A timely reply, usually with pending returns filed, is the standard way to prevent it.

6. ASMT-13 — Best judgment assessment. If returns remain unfiled despite notice, the department can assess your tax liability itself, under Section 62, based on available information rather than your own figures — and these assessments are frequently on the higher side. The good news is that filing the actual return within 60 days of this order automatically withdraws it; missing that window makes reversing an inflated assessment far harder.

7. DRC-07 — Summary of the demand order. This is what follows an unanswered or unsuccessful show-cause notice: a confirmed, legally enforceable demand for tax, interest, and penalty. This is not a document to negotiate informally — the available responses at this stage are payment, or a formal appeal within the statutory deadline (ordinarily three months, extendable by one more on genuine cause). Once this window closes, the demand becomes very difficult to contest on merits. If you're past this stage and weighing an appeal, our GST appeals and litigation guide covers the route from the first appeal through GSTAT and the High Court.

8. DRC-22 — Provisional attachment of property or bank account. This is the notice that causes the most genuine panic, and for good reason: under Section 83, the department can freeze a bank account provisionally — before any final liability is even determined — where it believes this is necessary to protect government revenue during an ongoing proceeding. The attachment can last up to a year, but it can also be objected to at any time using Form DRC-22A, with the Commissioner required to hear the taxpayer before deciding. Acting immediately, rather than waiting to "see what happens," is essential here — this is squarely a same-day-call-your-advocate situation. We cover the taxpayer's rights and the release process in detail in our GST recovery and bank attachment guide.

9. MOV notices — Goods and vehicle detention. For businesses that move goods, a discrepancy in an e-way bill (an expired validity, a vehicle number mismatch) can result in the vehicle and goods being detained at a checkpoint under a MOV series notice, with a penalty calculated on the goods' value before release. Because this stops goods mid-transit, it's one of the few GST notices where the practical cost of delay compounds by the day, not the month.

10. Notices alleging fake invoicing or bogus input tax credit. The most serious category on this list, these allege deliberate fraud — circular trading, invoices from non-existent suppliers, or credit claimed without any actual supply of goods or services — and can, in serious cases, lead to prosecution and arrest under Section 132, alongside the tax demand itself. Even businesses that dealt with a fraudulent supplier unknowingly can be drawn into these proceedings as a downstream recipient, which is exactly why the ITC reconciliation habits covered in our other GST guides matter well before any notice arrives.

The single most useful thing to know about any GST notice is which of these ten categories it actually falls into — a scrutiny query and a bank attachment order both arrive as intimidating government correspondence, but they call for entirely different urgency and entirely different responses. If you've received a GST notice and aren't sure which of these it is, that's the first thing worth having reviewed, not the last. Our GST & Tax practice reviews and responds to GST notices for businesses across Chennai and Tamil Nadu, from a routine ASMT-10 query through to bank attachment and fraud allegations.