GSTN ADVISORY ON DRC-01C COMPLIANCE FOR ITC DISCREPANCIES
The Goods and Services Tax Network (GSTN) has recently issued an advisory regarding the implementation of compliance related to DRC-01C. This advisory addresses the discrepancy in Input Tax Credit (ITC) between GSTR-2B and ITC claimed in GSTR-3B, as per the new Rule 88D introduced under CGST Rule, 2017. Relevant Advisory is as follows:
Goods and Services Tax Network GSTN
Advisory in respect of introduction of Compliance Pertaining to DRC-01C (Difference in Input Tax Credit (ITC) available in GSTR-2B & ITC claimed in the GSTR-3B)
Dear Taxpayers,
1.The Government vide Notification No. 38/2023 – Central Tax dated 04th Aug, 2023 inserted the Rule 88D in CGST Rule, 2017 dealing with difference in input tax credit available in GSTR-2B and ITC availed in GSTR3B. This functionality vis a vis this rule has now started operating on the GST portal.
2. The system now compares the ITC available as per GSTR-2B/2BQ with the ITC claimed as per GSTR3B/3BQ for each return period. If the claimed ITC exceeds the ITC available as per GSTR-2B by predefined limits, as directed by competent authority, the taxpayer shall receive an intimation in the form of Form DRC01C.
3. Upon receiving the intimation, the taxpayer must file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03 or provide an explanation for the difference out of the options provided in the form or even choose a combination of both options and file it.
4. 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.
Thanking you,
Team GSTN
