Draft a Professional GST Show Cause Notice(SCN) Reply Letter Format in Word

A Show Cause Notice is not uncommon. Your business may receive an SCN if they find discrepancies or errors while you file tax returns. The response with the right GST Notice Response Format is a way to ensure that you have the chance to prove that you are not guilty or have taken measures to rectify your errors during the payment of GST returns. 

While the cause behind an SCN, it's always advised to seek a tax consultant in Gurgaon before you take any further actions. In the later sections, we will discuss what is a show cause notice, why it is issued, what to do after you receive a notice from tax authorities, and how to write an effective response in Word.

What is a Show Cause Notice?

A Show Cause Notice(SCN) is a form of communication sent to a taxpayer by the tax authorities. It is a type of notice where the GST council asks you to provide clarification on why they should not penalize you after you have committed an action or lack of action leading to the violation of the GST law(Goods and Services Tax). This is done to ensure taxpayers have the chance to present their case to the GST council before legal actions against the taxpayer are taken. 

Recommended: How To Reply For GST Notice - Respond to GST Notices and Orders

Why is a Show Cause Notice under GST law issued?

A show cause notice issued by the GST department may be due to many reasons, including:

• Compliance with GST Laws: If you have failed to file GST returns on time, have not fulfilled the payment of taxes, or have not maintained proper records.
• Tax Evasion: If you claim ineligible exemptions/credits or misrepresent the nature of supplies.
• Fraud: If you make misleading or false statements or use fake invoices.
• Input Tax Credit (ITC) Misuse: If you claim ITC on unreceived or ineligible supplies.
• Supply of Goods or Services With No Documentation: Lack of essential documentation during commercial activities.
• Filing Returns Late: If you have not filed returns on GSTR-1 and GSTR-3B for more than six months.

Why should you reply to Show Cause Notice?

You should reply to the show cause notice because of the following reasons:

• Penalty: If you fail to reply to the SCN, then you may be asked to pay a late fee or additional interest.
• Legal consequences: Tax authorities may believe that your failure to furnish proof or your not replying to the SCN means that you are involved in fraudulent activities.
• Disqualification from availing the ITC claim: GST authorities may disqualify you from availing ITC claims if they find you are misusing ITC claims or do not respond to the SCN appropriately.

Read More: Understanding Place of Supply Rules Under GST for Goods & Services

What to do after you receive a GST Notice?

Before you reply to the notice via the GST portal, this is what you should do:

• Carefully read the notice to understand the issue raised in the notice.
• Understand what type of GST notice you have received.
• Acknowledge the receipt and verify the information specified in the notice.
• Collect the essential documentation required to comply with GST rules.
• Reach out to one of the top chartered accountant firms in Gurgaon for professional advice.
• Make sure to reply within the time limit prescribed in the notice.
• Keep yourself informed through GST updates and information.

GST Show Cause Notice(SCN) Reply Letter Format in Word

Read the reply to GST notice format word carefully to draft reply within the mentioned due date:

From:

[Your Name and Designation]

[Company Name]
[Address]

Date: [DD/MM/YYYY]

To:

[The Designation of Authority]
[Address of the GST Office]

Subject: Reply to Show Cause Notice No. [Notice Number] dated [Notice Date]

Respected Sir/Madam,

This letter is in response to the Show Cause Notice (SCN) bearing number [Notice Number] dated [Notice Date], received from your office regarding [give a brief description of the issue mentioned in the SCN].

We would like to bring to your kind attention that [give a brief description of the issue and provide clarifications]. We have reviewed the records and found that [mention any corrections, errors, or clarifications, if applicable].

Please find attached the following documents for your kind perusal:

• Copy of GST Return [ GSTR-3B, GSTR-9, GSTR-1]
• Details of the ITC claim
• Purchase Records and Tax Invoices
• Any other relevant document(s)

We humbly request you to kindly consider our explanation and review the documents attached as reference. Please feel free to contact us should you require further clarification or information with regards to the Show Cause Notice.

Thank you for your time and consideration.

Yours faithfully,
[Your Name]
[Designation]
[Business Name]

Enclosures:
[List of attached documents]

Must Read: Mandatory Documents Required For GST Registration In India

Conclusion

A show cause notice is issued to notify taxpayers about issues found within GST registration or GST tax returns. While it may seem to be a reason to panic, you can consult a professional tax consultant to respond to the notice with full confidence. Failure to reply to the SCN can lead to consequences, so you need to make sure to respond on time.