Form DRC-01B

In December 2022, the Government of India introduced Rule 88C to the Central Goods and Services Tax (CGST) Rules, 2017. Rule 88C allows automated notifications to be sent to taxpayers if there is a mismatch between their GSTR-1/IFF and GSTR-3B. Notifications are sent when the tax liability reported in GSTR-1/IFF exceeds the tax paid in GSTR-3B by a specified threshold amount and percentage.

As a taxpayer, you must either:

• Pay the differential tax liability, along with interest under Section 50, using Form GST DRC-03, or
• Explain the difference in the tax payable within seven days.

Regardless of the action, you must respond using Part B of Form GST DRC-01B.

Form DRC-01B consists of two parts:

• Part A: Intimation of Difference in Liability reported in the Statement of Outward Supplies and the Return.
• Part B: Reply by the taxpayer in response to the intimation, divided into two sub-parts:
  • Sub-part 1: Make payment for the difference in liability reported.
  • Sub-part 2: Select a reason for the difference in liability reported and provide an explanation.

File Form DRC-01B

To file Form GST DRC-01B:

• Log in to the GST portal.
• Click the Services dropdown at the top of the page and select Return Compliance under Returns, or click Return Compliance under Dashboard.
• On the Return Compliance page, click View in the Liability Mismatch (DRC-01B) tile.

You can also use the Reference number, Return period, or Status filters at the top of the Liability Mismatch (DRC-01B) page and search for the acknowledgement number.

To filter Form DRC-01B by Reference Number:

• Click Reference Number at the top of the Liability Mismatch (DRC-01B) page.
• Enter the ARN and click Search.

If the status of the record is Pending, you can file Form DRC-01B.

To filter Form DRC-01B by Return Period:

• Click Return Period at the top of the Liability Mismatch (DRC-01B) page.
• Select the Financial Year and Return Period for which you want to file Form DRC-01B.
• Click Search.

To filter Form DRC-01B by Status:

• Click Status at the top of the Liability Mismatch (DRC-01B) page.
• Select Status and click Search.

On the Liability Mismatch (DRC-01B) page, you can view the acknowledgement number of all the return periods for which you received the notification in Form DRC-01B Part A.

As a taxpayer, you must either make payment for the difference in liability reported or select a reason for the difference in liability reported and provide an explanation in Part B of Form DRC-01B.

Make Payment for the Difference in Liability Reported

To make payment for the difference in liability reported in Part B of Form DRC-01:

• In the Paid the Difference Amount through DRC-03 section of Part B of Form DRC-01B, enter the ARN of the period for which you received the DRC-01B Part A notification.
• Click Validate.

A summary of the payment details made through DRC-03 towards the difference in liability reported will be displayed.

If you get the error message “Please provide valid ARN for DRC-03”, check the following:

• Ensure that the ARN is valid and that it corresponds to the DRC-03 and GSTIN for which you received the DRC-01B Part A notification.
• Verify that the cause of payment specified in DRC-03 is Liability mismatch - GSTR-1 to GSTR-3B.
• Ensure that the DRC-03 was filed on or after the date the DRC-01B Part A notification was issued.
• Confirm that the overall tax period aligns with the period for which the DRC-01B Part A notification was issued.
  • If you file GSTR-3B monthly, ensure that the from and to dates match the period.
  • If you file GSTR-3B quarterly, ensure that the period covers at least one month within the quarter.

If you haven’t made payment for the difference in liability reported, click Click Here for DRC-03 and complete the payment.

Select the Reason for the Difference in Liability Reported

To select a reason for the difference in liability reported in Part B of Form DRC-01B:

• In the Select and explain the reason for difference section of the Part B of Form DRC-01B:
  • Check the checkbox with the relevant reason and provide a detailed explanation in the text box next to the reason. The reason can be up to 500 characters.
  • If your reason is not listed, check Any Other Reason and provide a detailed explanation in the text box next to it.
  • Click Save.
  • Check the declaration checkbox at the bottom.
  • Select the Name of the authorized signatory and the Place. The Designation/Status and Date fields will be auto-populated.
  • Click Save.

You will receive a notification that the details have been saved.

• Click File GST DRC-01B.
• Click Download DRC-01B to download a system-generated draft order. Check the draft order carefully to rule out any discrepancies.
• In the pop-up that appears, click Proceed.
• On the following page choose whether to file using an Electronic Verification Code(EVC) or a Digital Signature Certificate(DSC). Click File DRC-01B With EVC or File DRC-1B With DSC.
• Enter the OTP sent to the email address and mobile number of the primary authorized signatory registered on the GST portal, and click Verify.

• In the pop-up that appears, click OK.

You have filed your reply to the DRC-01B Part A notification. You can check the status using the Status filter in the LIability Mismatch (DRC-01B) page.