GST DRC-01C Form to Handle ITC Differences in 3B and 2B

GSTN has introduced Form DRC-01C to address discrepancies in Input Tax Credit (ITC) between GSTR 2B and GSTR 3B, as outlined in the newly added Rule 88D of the Central Goods and Services Tax Rules, 2017 ("the CGST Rules"), through Notification No. 38/2023-Central Tax dated August 4, 2023.

The Applicable Rule of CGST

Rule 88D of the Central Goods and Services Tax Rules

Rule 88D of the CGST Rules details the procedure for tackling the discrepancies in the input tax credit available according to the auto-generated statement contained in the Input Tax Credit in GST and that availed in return.

(1) If a registered person claims more input tax credit in their tax return (FORM GSTR-3B) for a specific period than the available input tax credit stipulated in the auto-generated statement (FORM GSTR-2B) for that period, concerning that period or periods, depends on the scenario, by that sum and that percentage, as may be advised by the Council, the said registered person will be notified electronically on the common portal regarding these differences in Part A of FORM GST DRC-01C, electronically on the common portal, and a copy of that intimation shall also be sent to his e-mail furnished during registration or as per the modification from time to time, emphasizing the said errors and instruct the registered person to -

(a) Pay the excess input tax credit amount mentioned in FORM GSTR-3B, along with applicable interest under section 50, by submitting FORM GST DRC-03, or

(b) Provide solid reasons for the difference in input tax credit on the common portal within seven days.

(2) The registered person as per sub-rule (1) upon receiving the intimation mentioned in the same must either:

(a) Fully or partially pay the excess input tax credit amount mentioned in Part A of FORM GST DRC-01C, along with applicable interest under section 50, by submitting FORM GST DRC-03. The registered person must then provide the details of the payment in Part B of FORM GST DRC-01C, electronically on the common portal, or

(b) Electronically submit a response on the common portal, explaining the reasons for any remaining unpaid excess input tax credit amount mentioned in Part B of FORM GST DRC-01C, within the specified timeframe mentioned in the aforesaid sub-rule.

(3) If the registered person fails to pay the specified amount within the given timeframe mentioned in sub-rule (1) and does not provide an acceptable explanation for the default or if no explanation is provided, the outstanding amount will be demanded as per the provisions of section 73 or section 74, depending on the case.

Note:* A taxpayer can also use online Gen GST software to check the ITC differences in a single click. The software is designed by SAG Infotech company.