GST Compliance – Form DRC-01B (Liability Mismatch)

A. The Law

Relevant Sections – CGST Act, 2017

• Section 37: Furnishing details of outward supplies.
• Section 39: Furnishing of returns (GSTR-3B/3BQ).
• Section 61: Scrutiny of returns.
• Sections 73 & 74: Recovery of tax not paid, short paid, or liability mismatch.
• Section 168: Power of CBIC to issue instructions.

Relevant Rules – CGST Rules, 2017

• Rule 88C: System-based intimation of difference in liability between GSTR-1/IFF and GSTR-3B.
  • If liability reported in GSTR-1/IFF exceeds liability paid in GSTR-3B/3BQ beyond a threshold limit, intimation is sent in Form GST DRC-01B.
  • Taxpayer must respond through Part B of DRC-01B:
    1. Pay liability using DRC-03 and provide ARN, OR
    2. Provide reason/explanation for difference.
• Rule 59 & 61A: Related to return filing procedures under QRMP scheme.

B. How Do I – Step-wise Compliance Process

Step 1: Login

• Visit gst.gov.in.
• Login with valid GSTIN credentials.

Step 2: Navigate

• Go to Services > Returns > Return Compliance.
• In Liability Mismatch (DRC-01B) tile → Click View.

Step 3: Access Intimation

• DRC-01B page shows pending records. Search by:
  • Reference No. (ARN), or
  • Return Period (FY & Month/Quarter), or
  • Status (Pending/Completed).
• Click Reference No. hyperlink.

Step 4: Review Intimation

• Part A (System Generated):
  • Displays liability reported in GSTR-1/IFF vs liability paid in GSTR-3B.
  • Downloadable PDF available.
• Part B (Taxpayer Reply):
  • Option 1: Enter ARN of DRC-03 challan for paid difference (validate ARN).
  • Option 2: Provide explanation with reason (dropdown + remarks up to 500 chars).
  • Taxpayer may provide either or both.

Step 5: Save & File

• Click Save → Select Declaration Checkbox.
• Enter Authorized Signatory details & Place.
• Preview draft order to verify details.

Step 6: Submit

• Click File with EVC/DSC.
• Enter OTP (if EVC).
• Success message & ARN generated.

Step 7: Download Final Copy

• Navigate again to Return Compliance → Liability Mismatch.
• Under “Completed” → Select Reference No. → Download final PDF.

C. FAQs (15 Practical Clarifications & Errors)

1. When is DRC-01B issued?
   When GSTR-1 declared liability > GSTR-3B paid liability beyond threshold.
2. Is filing mandatory?
   Yes. Without filing Part B, next period’s GSTR-1/IFF cannot be filed.
3. Who must comply?
   Regular taxpayers, SEZ units/developers, casual taxpayers, QRMP taxpayers.
4. What is the frequency?
   Monthly filers – monthly DRC-01B; QRMP filers – quarterly.
5. How will taxpayer be intimated?
   Email & SMS with Reference No. + available in portal dashboard.
6. Can I file GSTR-1 after filing DRC-01B?
   Yes, instantly after filing. If issue persists, log out and retry.
7. What if ARN of DRC-03 is invalid?
   Check GSTIN, ARN must be after intimation date, cause of payment = “Liability mismatch GSTR-1 to GSTR-3B”, period must match.
8. Is it mandatory to pay through DRC-03?
   No, you may instead provide valid reasons for mismatch.
9. What if reasons are not properly explained?
   Error will pop up if reason selected but no explanation provided.
10. Can I deselect a reason after entering details?
    No, delete earlier entry first.
11. What if I ignore DRC-01B?
    GSTR-1/IFF filing will be blocked until compliance.
12. What reasons are acceptable?
    Examples:

• Amendment in next period.
• Clerical error corrected in subsequent return.
• Supply wrongly reported.
• Other system issues.

13. Can both payment & reason be submitted?
Yes, portal allows combination.

14. How to verify filing?
Check under “Return Compliance → Status → Completed”.

15. How to download filed form?
Use Reference No. → “Download DRC-01B” option.

D. Fillable Checklist – Form GST DRC-01B