GSTN issued Advisory for Online Compliance Pertaining to ITC mismatch – GST DRC -01C

The Goods and Services Tax Network (GSTN) has issued an Important Advisory for Online Compliance Pertaining to ITC mismatch – GST DRC-01C.

It is informed that GSTN has developed a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement and ITC claimed in GSTR-3B return online as directed by the GST Council. This feature is now live on the GST portal.

This functionality compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. 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 intimation.

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 discrepancy using Form DRC-03, or an explanation for the difference, or a combination of both choices.

In case, no response is filed by the impacted taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR-1/IFF.