Latest Advisory on Online GST Compliance: Addressing ITC Mismatch in Form DRC 01C

The GSTN issued Advisory No. 614 on November 14, 2023, guiding online compliance regarding ITC mismatches through GST DRC-01C.

In simpler terms, the GSTN has introduced a tool to automatically notify businesses through Form GST DRC-01C about differences in Input Tax Credit (ITC) between the GSTR-2B statement and the ITC claimed in the GSTR-3B return, as directed by the GST council. This tool is now active on the GST portal.

This tool compares the ITC figures in GSTR-3B/3BQ with those in GSTR-2B/2BQ for each return period. If the ITC claimed in GSTR-3B exceeds a set limit or the percentage difference surpasses a configurable limit compared to the ITC available in GSTR-2B, the taxpayer will receive a notification in the form of DRC-01C.

Upon receiving this notification, the taxpayer must respond by filing Form DRC-01C Part B. The taxpayer can choose to provide details of the payment made to resolve the difference through Form DRC-03, explain the reasons for the difference, or even choose a combination of both options.

Importantly, if no response is submitted by affected taxpayers via Form DRC-01C Part B, they won't be able to file their Form GSTR-1/IFF for the subsequent period.

Also Read: Important Advisory from GSTN on ITC Reversal as per Rule 37(A) Compliance