CBIC sets out how GST show cause notices and orders should be drafted
What changed. CBIC has issued guidelines to GST officers on show cause notices (SCNs), adjudication and first appeals. Points of interest to taxpayers:
- A pre-SCN intimation in Part A of FORM GST DRC-01A may be issued, wherever feasible, before a formal notice.
- An SCN must give specific facts and grounds and quantify the demand, year-wise where it covers several years.
- Section 74 or section 74A(5)(ii) (fraud, wilful misstatement or suppression) should not be invoked merely because tax was not paid or a scrutiny discrepancy was found. The notice must set out the material showing intent to evade tax.
- No more than three adjournments are allowed, so at most four hearing opportunities. Virtual hearings may be offered.
- Orders must examine each submission and cannot confirm more than the notice proposed or on new grounds (section 75(7)).
- Rectification under section 161 is limited to errors apparent on the face of the record. An application may be filed within three months.
- Appeals should be decided, as far as possible, within one year of filing.
Who it affects. Any registered business facing GST scrutiny, audit, a show cause notice or an appeal.
From when. The circular is dated 26 October 2026. It guides officers in pending and future proceedings.
What to do. - Check whether a notice gives the specific basis for any fraud or suppression allegation. - Make full written submissions in DRC-06 and keep proof of filing. - Ask for a personal hearing in writing. - Note that the circular says these guidelines are not to be cited in notices or orders. They describe how officers are expected to act.
Official source: CBIC Circular No. 258/04/2026-GST dated 26 October 2026
This is general information based on the law as on the date shown, not professional advice. Rules change often; check the current position before acting.