SHOW-CAUSE NOTICE - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

5. SHOW-CAUSE NOTICE 5.1. On receipt of reply from the person in Part B of FORM GST DRC-01A or if no reply is received within the given time, the Proper Officer shall serve the Summary of the notice in FORM GST DRC-01 along with a Show Cause Notice to the person liable to pay tax. The Show Cause Notice should contain the details of the case, the legal provisions applicable, the amount of tax demanded, interest payable under Section 50 of CGST Act, 2017 and penalty imposable under the relevant provisions of the Act. 5.2. CBIC vide Instruction No. 04/2023-GST, dated 23.11.2023, issued under F. No. 20016/41/2023-GST, has directed that the Summary of the notice in FORM GST DRC-01 shall be served electronically on the common portal. 5.3. A Show Cause Notice (SCN) should ideally comprise of the following parts, though it may vary from case to case: (a) Introduction of the case; (b) Legal frame work; (c) Factual statement and appreciation of evidences; (d) Discussion, facts and legal frame work relating thereto; (e) The period to which the Notice pertains to and the discussion on Limitation period, if applicable; (f) Calculation of tax amount payable and other amounts due, such as interest, penalty etc.; (g) Statement of charges-exact nature of violation of law, rules or safeguards etc. 5.4. The notice under Section 73 of the CGST Act, 2017, shall be served to the concerned taxpayer at least three months prior to the due date for issuance of the adjudication order specified under Section 73(10) of the CGST Act, 2017. The due date for issuance of the adjudication order is within three years from the due date for furnishing the Annual Return for the financial year to which the demand pertains or within three years from the date of erroneous refund. 5.5. The notice under Section 74 of the CGST Act, 2017 shall be served to the concerned taxpayer six months before the due date for issuance of an adjudication order under Section 74(10) of the CGST Act, 2017. The due date for issuance of the adjudication order under Section 74(10) is within five years from the due date for furnishing of Annual Return for the relevant financial year to which the demand pertains. 5.6. In the demand portion, the tax amount pertaining to Central Tax (CGST), State Tax (SGST), Integrated Tax (IGST) and Compensation Cess, as applicable, are required to be clearly indicated. The breakup of each of the applicable taxes should be clearly shown either in the Annexure to the SCN or in a table inside the SCN. 5.7. The amount of demand should be clearly indicated in words as well as in figures. 5.8. The Relied Upon Documents should be clearly indicated and listed in an Annexure in the SCN. 5.9. In case the taxpayer has paid the entire duty amount and the SCN is being issued for interest and/or penalty then in this case, first the duty has to be demanded and then the taxpayer has to be asked to show cause as to why the amount (to be specified) already paid should not be appropriated against the tax demanded. Similarly, if the amount has been paid along with interest and the SCN is being issued only for penalty then duty and interest should first be demanded and then the amount paid should be appropriated against the tax demand and interest.