DRC-01B and DRC-01C: GST Mismatch Intimations

DRC-01B and DRC-01C are not notices from an officer. They are intimations the GST portal raises on its own when two of your returns disagree by more than a set margin. DRC-01B fires when the tax you declared in GSTR-1 is higher than the tax you paid in GSTR-3B. DRC-01C fires when the credit you claimed in GSTR-3B is higher than the credit GSTR-2B says is available. Both give you seven days to pay or explain, and both stop you filing your next GSTR-1 until you do. This post covers what triggers each one, the causes that are usually behind them, and how to reply so the matter ends at the intimation.

What DRC-01B and DRC-01C are

Both forms belong to the DRC family of demand and recovery forms, but they sit at the very start of it. Nobody has assessed anything. The system has compared two figures you filed yourself, found a gap above the threshold, and asked you to deal with it before you file again.

Each form has two parts. Part A is the intimation: the period, the two figures being compared and the difference. Part B is your reply. You receive the intimation on the portal and by email and SMS to your registered contact details, which is one more reason to keep those current.

The thresholds are not written into the rules. Rules 88C and 88D refer to an amount and a percentage recommended by the GST Council and configured on the portal. The figures widely reported for both forms are a difference of more than ₹25 lakh and more than 20 percent. Because these are set administratively, check the current values on gst.gov.in rather than relying on a number you read once.

DRC-01B: GSTR-1 liability above GSTR-3B payment

Rule 88C addresses one specific gap: the output tax you reported in GSTR-1 or IFF for a period is higher than the output tax you actually paid through GSTR-3B for that period. Your own sales return says you owe more than your own summary return paid.

When the difference crosses the threshold, Part A of DRC-01B is issued and you have seven days to do one of three things in Part B:

• Pay the difference, with interest, through Form DRC-03, and quote the DRC-03 reference in Part B.
• Explain the difference, choosing a reason and giving the working behind it.
• Do both: pay the part you agree is short and explain the rest.

If you do none of these, Rule 59(6) stops you filing GSTR-1 or IFF for subsequent periods. If the amount is left unpaid and unexplained, or your explanation is not accepted, the rule allows the amount to be recovered under Section 79.

The practical pressure of DRC-01B has dropped. Since the July 2025 tax period, outward liability in GSTR-3B is auto-populated from GSTR-1, IFF and GSTR-1A and cannot be edited, as covered in the GSTR-3B auto-lock post. The classic DRC-01B, where a lower figure was typed into Table 3.1, can no longer be created that way. Older periods, and edge cases in how the comparison is computed, can still produce one.

DRC-01C: GSTR-3B credit above GSTR-2B

Rule 88D is the mirror image on the credit side. It compares the input tax credit you claimed in GSTR-3B for a period with the credit shown as available in GSTR-2B for that period. If GSTR-3B claims more, and the excess crosses the threshold, Part A of DRC-01C is issued.

The reply options are the same shape. Within seven days you either pay an amount equal to the excess credit, with interest, through DRC-03, or explain in Part B why the excess is legitimate, or combine the two. Until you reply, Rule 59(6) blocks your next GSTR-1 or IFF. An amount left unpaid and unexplained can be taken up under Section 73 or 74, which is the route into a show-cause notice.

DRC-01C exists because GSTR-2B became the reference point for credit. Since Section 16(2)(aa) and the aligned Rule 36(4), credit on supplier invoices is generally limited to what appears in 2B. The difference between GSTR-2A and GSTR-2B matters here: a credit that is only in 2A is the typical excess the intimation picks up.

The two intimations side by side

Common causes, and the reply each one supports

Most intimations are not evidence of short payment. They come from the two returns measuring the same transactions at different times or in different places. Before you open Part B, work out which of these you are looking at.

Timing differences. An invoice reported in one month's GSTR-1 but whose tax was paid in the previous or next month's GSTR-3B creates a gap in one period that reverses in another. The same happens on the credit side when a supplier reports an invoice late and it lands in a later 2B than the period you claimed it in. Reply by explaining, with a period-by-period reconciliation that shows the tax was paid or the credit matched in the adjacent period.

Amendments. An invoice amended in a later GSTR-1, or corrected through GSTR-1A, can make one period's figures look high and the next look low. Explain, quoting the original and amended document numbers.

Reverse charge. On DRC-01C this is the most common legitimate explanation. Credit on tax you paid under reverse charge is claimed in GSTR-3B, but reverse charge on unregistered suppliers and imported services does not come through 2B. Show the reverse charge liability you discharged in Table 3.1(d) and the matching credit.

ISD credit. Credit distributed by your Input Service Distributor reaches your 2B only once the distributor files its GSTR-6. If the ISD filed late and you claimed the credit anyway, the gap is real for that period and the correct reply may be a payment, followed by a reclaim in the period the credit appears.

Wrong table or wrong head. Credit entered in the wrong row of Table 4, or IGST shown as CGST and SGST, can distort a comparison without changing the total you are entitled to. Explain, with the correct split.

Genuine error. Sometimes the credit really was over-claimed or the tax really was underpaid. Pay that part through DRC-03 with interest and explain anything else. An honest partial payment reads far better than an explanation that does not hold up.

How to reply without making it worse

Open the intimation from the notices section of your dashboard on gst.gov.in and read Part A carefully: the period, the two figures and the difference. Menu labels on the portal change, so if you cannot find it, search the portal's help pages for the form number.

1. Rebuild the comparison yourself. Take the same figures from your filed returns and check you get the same difference. If you do not, that is your first point of explanation.
2. Split the difference into its causes. Separate timing, amendments, reverse charge, ISD and genuine error. Each has a different reply.
3. Pay only what you owe. For the genuine shortfall, file DRC-03 with the right cause of payment and interest, then enter its reference in Part B.
4. Explain the rest with numbers. Choose the closest reason in Part B and give a short working: document numbers, periods and amounts. "Timing difference" with nothing behind it invites a follow-up.
5. Keep the file. Save the intimation, your reply, the DRC-03 and the working. If the matter comes back as an ASMT-10 scrutiny notice, that file is your answer.

Keeping the intimations from arriving

Both intimations are downstream of a reconciliation that did not happen before filing. On the liability side, the auto-lock has done much of the work: reconcile GSTR-1 to your sales register before you file it, correct through GSTR-1A before GSTR-3B, and the two returns cannot diverge in the old way.

On the credit side, the discipline is a monthly GSTR-2B to purchase register reconciliation before GSTR-3B. Claim what is in 2B, carry what is not to the period it appears in, and record every reverse charge and reclaim item separately so you can explain it quickly if an intimation arrives. Watch the Section 16(4) time limit while you wait on a late supplier.

Most 2B gaps start with a supplier who has not filed. Checking a supplier's GSTR filing history before you pay them tells you whether their invoice is likely to reach your 2B on time. The GSTIN verification API returns registration status and filing history in one call at ₹0.50 per verification, and the GST number search gives five free lookups a day if you only need to check a few suppliers. It checks suppliers only. It does not reconcile your books or file anything.

Frequently asked questions