GST DRC-01C Compliance Advice on ITC Mismatch

1. GSTN has developed a functionality that allows taxpayers to explain the difference between ITC available in GSTR-2B statements and ITC claimed in GSTR-3B returns online, as directed by the GST Council. The GST portal now has this feature available.
2. For each return period, this functionality compares the ITC declared in GSTR-3B/3BQ to the ITC available in GSTR-2B/2BQ. If the claimed ITC in GSTR 3B exceeds the available ITC in GSTR-2B by a specified limit, or the percentage difference exceeds the configurable threshold, the taxpayer will receive a DRC-01C notification.
3. When a taxpayer receives an intimation, he or she must respond using Form DRC-01C Part B. The taxpayer may provide details of the payment made to settle the differences using Form DRC-03, or an explanation for the difference, or a combination of both options.
4. If the impacted taxpayers do not file a response on Form DRC-01C Part B, they will be unable to file their subsequent period GSTR-1/IFF.

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