Form DRC-01B – Online compliance covering liability/ difference in GSTR-1 and GSTR-3B

Recently, on 29

th June 2023, an advisory was furnished by GSTN. As per the advisory, new functionality was enabled on the GST portal. The new functionality lets the taxpayer explain the difference between Form GSTR-1 and Form GSTR-3B. The new functionality compares the liability declared in Form GSTR-1 with the liability paid via Form GSTR-3B for each return period. In case of difference, an intimation in Form DRC-01B will be received under the following circumstances –

• The liability declared in Form GSTR-1 exceeds the liability paid in Form GSTR-3B by a pre-defined limit; or
• The percentage difference between the liability declared in Form GSTR-1 exceeds the configurable threshold from the liability paid via Form GSTR-3B.

The present article explains the basics of Form DRC-01B, the procedure to file Part B of Form DRC-01B and the consequence of the non-filing of the response.

Basics of Form DRC-01B

Form DRC-01B is a new functionality recently enabled on the GST portal. Form DRC-01B is issued to the taxpayer as and when a difference in liability is declared via

Form GSTR-1 and Form GSTR-3B. In case of any difference in liability, Form DRC-01B will be generated after filing the return in Form GSTR-3B, i.e., for the quarterly filers, Form DRC-01B will be generated after filing the quarterly return in Form GSTR-3B and for the monthly filers, Form DRC-01B will be generated after filing of monthly return in Form GSTR-3B. Form DRC-01B applies to various types of taxpayers like regular taxpayers; casual taxpayers; composition scheme dealers; SEZ units, and SEZ developers. Part A of Form DRC-01B will cover intimation, wherein the difference in liability will be summarized/ explained, and the taxpayer will have to furnish their response via Part B of Form DRC-01B. It is important to note that as and when the taxpayer receives intimation in Form DRC-01B. It is mandatory to furnish a reply/ response via Part B of Form DRC-01B. As and when Part A of Form DRC-01B is generated, a Reference Number will be assigned. Said intimation will be sent to the taxpayer via SMS and e-mail.

Procedure to file part B of Form DRC-01B –

The taxpayer who received intimation in Form DRC-01B can file a response via part B of Form DRC-01B by following the below-mentioned steps –

• STEP 1 – Visit the GST porta
• STEP 2 – Click ‘Login’ and provide the appropriate ‘username,’ ‘password’ and captcha;
• STEP 3 – Navigate the below-stated path – Services > Returns > Return Compliance

• STEP 4 – ‘Liability Mismatch (DRC-01B)’ will be displayed. Click ‘view’;
• STEP 5 – The page showing Reference Number, Form Type, Financial Year, Return Period, and Status will be displayed. Click the hyperlink available in the Reference Number;
• STEP 6 – Liability Mismatch (DRC-01B) covering the following parts will be displayed –
  • Part A – Intimation of difference in liability as reported in the statement of outward supplies (GSTR-1) and that reported in return (GSTR-3B);
  • Part B – Reply by the taxpayer regarding intimation of difference in liability.

Notably, Part A will be an intimation that is system generated, and no alteration is possible in the same. Reply explaining the difference is to be furnished via Part B.

• STEP 7 – The following are the possibilities concerning the difference in liability vis-à-vis the taxpayer –
  • Possibility 1 – The taxpayer accepts the difference in liability, and accordingly, the payment of the difference amount is made; or
  • Possibility 2 – The difference in liability is not accepted, and accordingly, the taxpayer needs to provide a valid reason explaining the said difference; or
  • Possibility 3 – The taxpayer accepts some difference in liability, and hence the difference amount is paid. Whereas, some difference in liability is not accepted; hence, a valid reason must be provided.
• STEP 8 – Based on the possibility, as narrated above, details in Part B of Form DRC-01B are to be furnished –

1. 1. When the difference in liability is accepted – provide the ARN of DRC-03 via which the difference amount is paid;
   2. When the difference in liability is not accepted – explain the reason by clicking one or more of the options if applicable or by clicking any other reason.

• STEP 9 – Click the verification box, select ‘Name of Authorized Signatory’ from the drop-down list, and enter ‘Place.’
• STEP 10 – Click SAVE.
• STEP 11 – Post verifying all the details; click ‘File GST DRC-01B’.

A consequence of non-filing of response on receipt of intimation in Form DRC-01B –

If the recipient of intimation in Form DRC-01B fails to respond via Part B of Form DRC-01B (as detailed above). Then, in such a case, the taxpayer cannot file a return in Form GSTR-1/ IFF for a later period.