GST Notices and Appeals in 2026: What to Do When a Notice Arrives, and Why 31 July Matters

Direct answer: Every GST notice carries its own reply window and its own form. A scrutiny notice in ASMT-10 must be answered in ASMT-11, ordinarily within 30 days. A pre-notice intimation in DRC-01A is answered in Part B of the same form. A show cause notice in DRC-01 must be replied to in DRC-06 within the period stated in the notice. Once an order in DRC-07 is passed, the first appeal under Section 107 of the CGST Act, 2017 must be filed within 3 months, with a further 1 month condonable, and requires a pre-deposit of 10% of the disputed tax. A second appeal lies to the GST Appellate Tribunal under Section 112. Where the order of the First Appellate Authority was communicated before 1 May 2026, the last date to file that appeal is 31 July 2026, under Notification S.O. 3502(E) dated 30 June 2026.

1. Why GST notices are arriving in volume right now

Three things have converged. First, the limitation clock for the earlier years has been running out, which pushes officers to issue notices rather than let demands lapse. Second, system-driven scrutiny has matured: mismatches between GSTR-1, GSTR-3B, GSTR-2B and the annual return are now flagged automatically, so a notice no longer requires an officer to notice anything. Third, the GST Appellate Tribunal has finally begun functioning, which means the disputes that had been parked for years are moving again.

The practical consequence is that a business can receive a notice for a year it considers long closed, on a discrepancy generated by a reconciliation it has never seen. Treating that as an accounting query rather than as the first step of an adjudication is the single most expensive mistake in this area.

2. The notice ladder: know which rung you are on

GST proceedings are sequential. The form number tells you where you stand, what your rights are, and how much time you have.

Stage	Form	Statutory basis	Your response
Return scrutiny	ASMT-10	Section 61 read with Rule 99	ASMT-11, ordinarily within 30 days; acceptance is recorded in ASMT-12
Departmental audit	ADT-01 / ADT-02	Section 65	Records and reconciliations during audit; written submissions on the draft findings
Pre-notice intimation	DRC-01A	Rule 142(1A)	Part B of DRC-01A, accepting or contesting the liability
Show cause notice	DRC-01	Section 73, 74 or 74A	DRC-06, within the time stated in the notice, with a hearing request
Adjudication order	DRC-07	Section 73(9), 74(9) or 74A(6)	Pay, seek rectification under Section 161, or appeal
First appeal	APL-01	Section 107	3 months from communication, 1 further month condonable
Second appeal	APL-05	Section 112	3 months, subject to the notified backlog date

Two points are commonly missed. A DRC-01A is not a formality; a well-drafted Part B reply is the cheapest opportunity in the entire process to close a matter before a show cause notice exists. And an ASMT-10 answered casually, without supporting reconciliations, tends to reappear months later as a DRC-01 built on the same figures.

3. The limitation regime changed from FY 2024-25

Until FY 2023-24, demands were raised under Section 73 for cases not involving fraud, wilful misstatement or suppression of facts, and under Section 74 where those charges were alleged. The two carried different limitation periods, which gave officers an incentive to allege fraud simply to obtain the longer window.

The Finance (No. 2) Act, 2024 inserted Section 74A, which applies to tax periods from FY 2024-25 onwards, with the relevant provisions brought into force from 1 November 2024. Sections 73 and 74 continue to govern periods up to FY 2023-24.

3.1 Time limits at a glance

Provision	Periods covered	Notice	Order
Section 73	Up to FY 2023-24, no fraud alleged	At least 3 months before the order deadline	3 years from the due date of the annual return
Section 74	Up to FY 2023-24, fraud or suppression alleged	At least 6 months before the order deadline	5 years from the due date of the annual return
Section 74A	FY 2024-25 onwards, both categories	Within 42 months of the due date of the annual return	Within 12 months of the notice, extendable by up to 6 months

Section 74A unifies limitation but it does not unify penalty. The allegation of fraud, wilful misstatement or suppression still determines the penalty exposure, and it still has to be established by the department rather than asserted. The window to settle at a reduced penalty after a notice has been widened to 60 days under the new section.

3.2 Why limitation is the first thing to check

Limitation under GST is jurisdictional. If a notice or an order falls outside the statutory period, the demand is not merely weak on merits; it is unsustainable. Before drafting a single paragraph on the substance of a demand, the dates should be plotted: the due date of the annual return for the year in question, the date the notice was issued, the date it was served, and the outer date for the order. On periods from FY 2024-25 onwards, a notice issued under Section 73 or Section 74 rather than Section 74A raises a question of jurisdiction in itself.

A related point is being argued at present. Proper officers were assigned for the purposes of Section 74A only by Circular 254/11/2025-GST dated 27 October 2025. It is being contended that the conferment of jurisdiction is substantive, cannot be presumed to operate retrospectively, and that notices issued under Section 74A before that date are therefore open to challenge for want of jurisdiction. The point is not settled, and it should be taken as a preliminary objection on the record rather than relied on as though it were decided; but on a Section 74A notice predating that circular, it is worth raising.

4. Six checks before you draft a reply

1. Limitation. Plot the dates as above and record the conclusion in the reply, not merely in the file.
2. Service. Section 169 prescribes the modes of service. Notices uploaded to a tab on the common portal that the taxpayer does not monitor are a recurring source of ex parte orders, and the manner of service is frequently the strongest ground available.
3. Scope. Section 75(7) bars a demand exceeding the amount, or resting on grounds other than those, stated in the show cause notice. Compare the order against the notice line by line.
4. Hearing. Section 75(4) requires an opportunity of hearing where a request is made in writing or where an adverse decision is contemplated. Ask for the hearing expressly; do not assume one will be offered.
5. Input tax credit timing. For the early years, Section 16(5) treats credit for FY 2017-18 to FY 2020-21 as within time if the relevant return was furnished by 30 November 2021. A large number of old credit-denial demands do not survive this provision.
6. Arithmetic. Reconcile the department’s own figures. Demands built on GSTR-2A rather than GSTR-2B, on gross turnover without credit notes, or on double-counted amendments are common and are best rebutted with a working, not an argument.

A reply should be structured in the order in which a reviewing authority will read it: preliminary objections first, then facts, then the substantive response to each allegation separately, then the relief sought, with every annexure indexed and cross-referenced from the body.

5. The appellate route, and the date that matters this month

5.1 First appeal under Section 107

An appeal against an adjudication order lies to the Appellate Authority in Form APL-01 within 3 months of communication of the order. The Appellate Authority may condone a delay of up to 1 further month on sufficient cause; beyond that, the statutory outer limit leaves no discretion, and the only remaining route is writ jurisdiction.

The appeal is not maintainable unless the appellant pays, in full, the tax, interest, fine, fee and penalty admitted, together with 10% of the remaining tax in dispute, subject to a ceiling of Rs 20 crore under each enactment. Where the order demands penalty only, without any tax, a proviso inserted by the Finance Act, 2025 requires a pre-deposit of 10% of that penalty, with effect from 1 October 2025; a corresponding proviso applies at the Tribunal stage. For appeals against penalty-only orders filed before that date, no pre-deposit was payable, the unamended Section 107(6) having been tied to tax in dispute alone. Departmental practice on the portal is that pre-deposit is paid through the Electronic Cash Ledger; there is judicial authority accepting the Electronic Credit Ledger in certain circumstances, but relying on it without advice invites an avoidable dispute over admission.

5.2 Second appeal to the GST Appellate Tribunal

The GST Appellate Tribunal is now functioning, with a Principal Bench at New Delhi and State Benches, and filing is electronic through the GSTAT e-filing portal. An appeal under Section 112 is filed in Form APL-05 within 3 months of communication of the order of the Appellate Authority or the Revisional Authority.

The pre-deposit at this stage is a further 10% of the remaining tax in dispute, in addition to the 10% already paid under Section 107(6), subject to a ceiling of Rs 20 crore under the CGST Act and the corresponding State enactment, and Rs 40 crore for integrated tax. The cumulative figure is 20%, but it is two separate computations of 10%, not a single payment of 20% at the Tribunal. Once the pre-deposit is made, recovery of the balance of the demand is deemed stayed under Section 112(9) until the appeal is disposed of.

5.3 The backlog window closes on 31 July 2026

Because the Tribunal did not exist for the first several years of GST, a very large volume of first appellate orders had no forum to go to. The Government had notified 30 June 2026 as the last date for filing those appeals. By Notification S.O. 3502(E) dated 30 June 2026, issued under Section 112(1) read with Section 112(3) and superseding Notification S.O. 4220(E) dated 17 September 2025, that date has been extended to 31 July 2026, following representations about congestion on the filing portal.

The extension does not apply to every pending order. It is defined by cutoff dates, and the distinction between an appeal and an application matters:

Filing	Order date	Last date to file
Appeal under Section 112(1)	Communicated before 1 May 2026	31 July 2026
Appeal under Section 112(1)	Communicated on or after 1 May 2026	3 months from communication
Application under Section 112(3)	Passed before 1 February 2026	31 July 2026
Application under Section 112(3)	Passed on or after 1 February 2026	6 months from the date of the order

An order communicated on, say, 20 May 2026 therefore does not benefit from the extended date at all; its own 3-month period governs, and that period may well expire after 31 July 2026.

Two cautions follow. First, the separate relaxation of scrutiny and defect-management procedures until 31 December 2026 is a procedural accommodation at the Registry; it does not extend limitation, and it should not be read as further time to file. Second, an appeal is not complete on submission alone. Defects identified at scrutiny, or a pre-deposit paid through the wrong ledger, can leave an appeal unadmitted even though it was lodged within time.

If your business holds any order of a First Appellate Authority communicated before 1 May 2026 that has not yet been carried to the Tribunal, the position should be reviewed this week rather than at the end of the month.

6. Recurring mistakes

1. Letting an ASMT-10 lapse because the amount looks small. The figure in a scrutiny notice is an opening position, not a ceiling.
2. Replying on merits without recording preliminary objections, which are then treated as an afterthought at the appellate stage.
3. Not asking for a personal hearing, and then contesting an ex parte order without having created a record.
4. Computing pre-deposit on tax plus interest and penalty. The base is the disputed tax alone.
5. Missing the outer date for a first appeal in the belief that delay will be condoned. Condonation beyond 1 month is not available to the Appellate Authority.
6. Filing without the reconciliation working that supports the reply. Assertions that are not tied to a schedule rarely survive.

7. Frequently asked questions

7.1 How long do I have to reply to a GST show cause notice?

The period is stated in the notice itself and is counted from service. The reply is filed in Form DRC-06 on the common portal. An extension may be sought, but it should be requested in writing before the stated date expires, not after.

7.2 Can I still fix an error in an order without filing an appeal?

Section 161 permits rectification of an error apparent on the face of the record. An application by the affected person must be made within 3 months of the date of the order, and the authority is to pass the rectification order within 6 months, that outer limit not applying to purely clerical or arithmetical slips. Rectification is confined to obvious errors; a disagreement on interpretation or on appreciation of evidence is a matter for appeal, and the limitation period for the appeal continues to run in the meantime.

7.3 What happens if the department does not pass an order within the time limit?

The limitation periods for orders are mandatory. Where an order is passed beyond the statutory period, the demand is open to challenge on that ground alone, independent of the merits.

7.4 Is the pre-deposit refundable?

Yes. Where the appeal succeeds, the pre-deposit is refundable, with interest under Section 115 from the date of payment.

7.5 My order relates to FY 2018-19 and involves denial of input tax credit for late filing. Is anything available?

Section 16(5) is relevant. Credit for FY 2017-18 to FY 2020-21 is treated as availed in time if the return under Section 39 for the relevant period was furnished up to 30 November 2021. Sub-sections (5) and (6) were inserted with retrospective effect from 1 July 2017. Where an order has already been passed on this ground and no appeal has been filed, Notification 22/2024-Central Tax dated 8 October 2024 notified a special procedure for rectification of such orders under Section 148, and Circular 237/31/2024-GST dated 15 October 2024 sets out how it is to be applied. Whether it disposes of the demand depends on the exact ground on which credit was denied.

7.6 Do I need a professional, or can I reply myself?

A straightforward reconciliation difference can often be answered in-house. Where the notice alleges suppression, where the amount is material, where the year is close to limitation, or where an appeal is contemplated, the drafting of the reply determines what can be argued later. The record made at the notice stage is the record the Tribunal will read.

8. A closing observation

GST adjudication rewards preparation at the earliest stage and punishes it nowhere. The objections that decide an appeal are almost always available at the notice stage, and are almost always lost by not being taken then. Where a demand touches cross-border supplies, the analysis usually begins with place of supply rather than with the demand itself; our note on place of supply and export of services sets out that framework. Further material on indirect and direct tax work is on our Taxation page.

This article states the position as on 21 July 2026 and is general in nature. It is not a substitute for advice on a specific notice or order, and appellate strategy in a particular case should be settled after examining the record.