Advisory on Implementation of DRC-01C Compliance

The advisory note includes

1. In Notification No. 38/2023 - Central Tax dated August 4, 2023, the government included Rule 88D in the CGST Rule, 2017 regarding the difference between ITC available in GSTR-2B and ITC available in GSTR-3B, as per GSTN. On the GST portal, this feature pertaining to this provision is currently operational.
2. Note also states that the system now examines the ITC available under GSTR-2B/2BQ with the ITC claimed under GSTR-3B/3BQ for each return period. If the claimed ITC exceeds the ITC provided under GSTR-2B by predetermined limits, as directed by the competent authorities, the assessee will be notified through Form DRC-01C.
3. After receiving the information, the taxpayer is required to file a response using Form DRC-01C Part B. The taxpayer has the option of filing Form DRC-03 with details of the payment made to resolve the difference, Form DRC-03 with an explanation for the difference using the options provided, or Form DRC-03 with a combination of both.
4. It also states that if affected taxpayers fail to submit a response on Form DRC-01C Part B, they will be unable to file their GSTR-1/IFF for the subsequent period.

Source(s): gst.gov.in, Team EZTax.in