What a GST notice actually says
A client slides a Section 73 notice across the desk: ₹3.2L ITC reversal demanded. Riya reads it. The 'discrepancy' is GSTR-3B vs GSTR-2B vendor timing, not fraud. The response is paperwork, not panic.
Across-the-desk shot. A silhouetted client's arm slides a paper across the desk to Riya. The paper shows 'FORM GST DRC-01 / Section 73' at the top. Riya, in a charcoal blazer, raises an eyebrow.
“The notice is the symptom. Not the disease.”
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Let me see what they're actually claiming.
GST notices look scary. Most of them aren't fraud — they're timing.
Riya pointing at a comparison table on her laptop: GSTR-3B (her client filed) claims ₹12.0L ITC, GSTR-2B (the GST department sees) shows ₹8.8L, the gap of ₹3.2L is vendors who haven't uploaded yet.
“GSTR-3B says one thing. GSTR-2B says another. The truth is in the gap.”
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The ₹3.2 lakh isn't missing. Your vendors just haven't uploaded their invoices yet. The department doesn't know that.
GSTR-2B is a snapshot. Vendors file on their cycle, not yours.
Riya with a restrained smile. On the desk: the notice, a printed GSTR-2B reconciliation sheet, and a draft response letter ready to send.
“The response, not the panic.”
Transcript›
We respond with the vendor-side timing schedule. The ₹3.2 lakh is in 2B-next-month, not in a write-off. Department closes the notice.
Reconcile before the notice. Then the notice is paperwork, not panic.
The longer take
Section 73 of the CGST Act is the workhorse notice for tax authorities — it lets them demand recovery of input tax credit that they believe was wrongly claimed, with a 30-day window to respond. For Indian e-commerce sellers and SMBs, the vast majority of Section 73 notices are not fraud findings. They are the bureaucratic surfacing of a structural mismatch between two GST returns: GSTR-3B, which is what the taxpayer self-reports as ITC claimed, and GSTR-2B, which is the system-generated statement of what the taxpayer's vendors actually uploaded.
When a vendor doesn't file their GSTR-1 on time, their downstream customers see a gap. The customer claimed ITC on the invoice in their GSTR-3B because they have the invoice in hand; the GSTN system doesn't see the corresponding entry in GSTR-2B because the vendor hasn't yet filed. The gap is real but it is timing, not fraud. By the next month or two, the vendor files and the gap closes. But in the interim, the GSTN system flags the discrepancy and a notice can issue.
The clean way to handle this is to reconcile GSTR-3B against GSTR-2B every month, tag each gap by reason (vendor-pending / vendor-disputed / genuinely erroneous), and maintain the running list. When a notice arrives, the response writes itself: attach the tagged reconciliation, show the vendor-side timing schedule, indicate when each pending item is expected to appear in subsequent 2Bs. Most departments accept this and close the notice with no demand. The notices that escalate to actual recovery proceedings are almost always the cases where the taxpayer cannot produce the reconciliation — not because the underlying claim was wrong.
The structural problem is that this reconciliation is exactly the kind of monthly discipline that gets pushed to the bottom of a finance team's list until a notice forces it. The fix is not heroic effort during notice season; it is a quiet monthly routine where the GSTR-2B JSON is downloaded, joined against the purchase register, and the gaps are tagged. A reconciliation tool that does this end-to-end takes the pressure off, but the discipline can also be done in a spreadsheet for low-volume businesses. The expensive failure mode is doing it nowhere.
For founders who haven't yet been notice'd, the operational advice is simple: download GSTR-2B every month within a week of it being generated, reconcile against the purchase register, file the result as a monthly workpaper. The first time a notice arrives, the response will write itself in 30 minutes instead of 30 days. For founders who have already been notice'd: a competent CA or fractional bookkeeper can prepare the response from the reconciliation; the discipline starts the cycle after the notice closes.