Tax Consultant
840 Points
Posted on 15 June 2026
First step when you get a GST SCN is to identify which section it is under: Section 73 (non-fraud) or Section 74 (fraud or wilful misstatement). This determines your timeline, penalty exposure, and the best payment strategy.
Section 73 (non-fraud):
- 30 days to reply
- Pay tax plus 15% penalty before the reply date and proceedings close
- After reply date but before order: penalty goes up to 25%
- After order: 25% of tax (minimum)
Section 74 (fraud):
- 30 days to reply
- Pay within reply period: 15% penalty
- After order: minimum 25%, up to 100% of tax as penalty
What to include in the reply:
1. Point-by-point response to each allegation in the notice
2. Reconciliation statement if the issue is an invoice mismatch
3. Supporting documents (invoices, bank statements, e-way bills as relevant)
4. Relevant judicial precedents if any apply to your fact pattern
One thing to never do: ignore the notice. Even a bad notice requires a reply. An ex-parte order after a missed reply is harder to challenge than a contested one.
For detailed guidance on drafting the actual response, this [guide on responding to GST notices](https://taxgarden.in/blog/how-to-respond-to-gst-notices) covers the full process.