SCN in GST — Show Cause Notice under Section 73, 74 and 74A

SCN full form in GST

SCN is the acronym for Show Cause Notice. In GST it is the formal notice that precedes an adjudication order. The taxpayer is asked to show cause why the proposed tax, interest and penalty should not be recovered.

The SCN itself is a detailed document setting out the officer's allegations, the period involved, the section under which the demand is proposed, and the annexed working. The summary is served on the portal in DRC-01.

Section 73 vs Section 74 vs Section 74A

The correct section drives the limitation period, the penalty exposure, and the standard of proof:

• Section 73 — non-fraud cases. SCN within 33 months, order within 3 years; penalty 10% or ₹10,000 whichever higher.
• Section 74 — fraud, wilful mis-statement or suppression. SCN within 54 months, order within 5 years; penalty equal to tax.
• Section 74A — unified provision for FY 2024-25 onwards. Consolidated SCN and order timelines; penalty depends on whether allegations of fraud are made out.

How the SCN is served — DRC-01

Rule 142(1) requires the summary of every SCN to be served electronically in Form GST DRC-01. This DRC-01 is what the taxpayer sees on the portal, along with the full SCN as an annexure. The reply is filed electronically in Form GST DRC-06 within 30 days of service.

Limitation on the SCN

The SCN must be issued at least 3 months (Section 73) or 6 months (Section 74) before the last date for passing the order. FY-wise time limits have been extended by CBIC notifications for several past years — a limitation challenge is a threshold ground and should be raised in the reply itself.

How to reply to an SCN in GST

Reply in Form GST DRC-06 within 30 days. Cover — jurisdiction, limitation, natural justice; statement of facts; paragraph-wise response; grounds on law and merits with case law; DRC-03 payment particulars for admitted portion; prayer and personal hearing request.

Frequently asked questions