Notices · GST

GST DRC-01A: reply format, and how to respond in Part B

The officer has worked out tax he says you owe, and is telling you before a show cause notice. Paying now costs no penalty in most cases; objecting in Part B puts your side on record first.

Quick Statutory Answer

Form GST DRC-01A is an intimation under rule 142(1A) of the CGST Rules: before serving a show cause notice under section 73, 74 or 74A of the CGST Act, the proper officer may communicate the tax, interest and penalty he has ascertained, in Part A of the form. You can pay through Form DRC-03, pay part and object to the rest, or object to all of it, in Part B; since 10 July 2024 the officer may accept the payment or submissions in Part C. Paying the tax and interest before the notice means no notice for the amount paid and, in a non-fraud case, no penalty (sections 73(5) and 74A(8)); where fraud or suppression is alleged the penalty is 15% of the tax (sections 74(5) and 74A(9)).

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At a glance

What For this notice
Sent by The GST proper officer, before a show cause notice
Under Rule 142(1A) and (2A), CGST Rules; sections 73, 74 and 74A, CGST Act
Reply in Part B of Form DRC-01A on the GST portal, and payment through Form DRC-03
Deadline The date given in the intimation
If ignored A show cause notice under section 73, 74 or 74A, summarised in Form DRC-01

GST DRC-01A reply format

A fill-in format: replace every [bracket] with your own facts and delete what does not apply. Copy it, or download it in Word, free.

From

[Legal name of the business] GSTIN: [GSTIN] [Principal place of business]

Date: [DD/MM/YYYY]

To

The Proper Officer [Designation, e.g. State Tax Officer / Superintendent], [Ward / Circle / Range] [Office address]

Subject: Reply in Part B of Form GST DRC-01A to the intimation Reference No. [reference number] dated [date], under section [73 / 74 / 74A] for the period [period]

Respected Sir/Madam,

1. We refer to the above intimation under rule 142(1A) of the CGST Rules, 2017, communicating tax of Rs. [amount], with interest and penalty, as ascertained for the period [period]. We submit our reply by the date given in the intimation.

Amounts accepted

2. [If any] We accept Rs. [amount] on account of [item]. It has been paid with interest of Rs. [amount] under section 50 through Form GST DRC-03, ARN [ARN] dated [date], enclosed as Annexure A.

Item 1: [as described in Part A] — Rs. [amount]

3. Part A states that [summarise]. This is not payable because [reasons — the reconciliation first, then the provision relied on, then the documents]. A reconciliation statement is enclosed as Annexure B.

Item 2: [as described in Part A] — Rs. [amount]

4. [Explanation of the second item, with the documents that support it.]

Penalty

5. [Only where Part A invokes section 74 or the fraud limb of section 74A:] There was no fraud, wilful misstatement or suppression of facts, because [facts].

Prayer

6. We request that the payment and these submissions be accepted by an intimation in Part C of Form GST DRC-01A, and that no show cause notice be issued for the amounts explained above. We are available to explain any point in person.

Enclosures

Annexure A — DRC-03 and DRC-04 acknowledgements, if any Annexure B — Reconciliation statement for [period] Annexure C — Invoices, credit notes and return extracts relied on

Thanking you, For [Legal name of the business] [Name of authorised signatory] [Designation] Place: [Place]

Why you may have received it

  • A scrutiny of returns (ASMT-10) or an audit has found tax the officer says is short paid, and he is offering the chance to pay before a formal notice.
  • Input tax credit claimed in GSTR-3B is more than GSTR-2B shows, often because a supplier did not file.
  • Tax paid in GSTR-3B is less than the liability reported in GSTR-1, or was paid at the wrong rate.

How to reply, step by step

  • Read Part A: the section it is under (73 or 74 for periods up to 2023-24, 74A from 2024-25), the tax periods, and how the tax, interest and penalty were worked out.
  • Reconcile each amount with your books, GSTR-1, GSTR-3B and GSTR-2B, and separate what you accept from what you dispute.
  • Pay what you accept, with interest under section 50, through Form DRC-03 against the intimation. The portal issues an acknowledgement in Form DRC-04.
  • For what you dispute, file submissions in Part B of DRC-01A with the reconciliation and documents. Part B is also where a partial payment is recorded (rule 142(2A)).
  • Keep the DRC-04 and the Part B acknowledgement. The officer may accept them in Part C; if he does not, expect a show cause notice for the balance, and keep that reply consistent with this one.

What to attach

  • A reconciliation for each amount in Part A.
  • GSTR-1, GSTR-3B and GSTR-2B extracts for the periods, with the invoices or credit notes that explain each difference.
  • DRC-03 and DRC-04 acknowledgements for anything paid.
  • Any earlier ASMT-11 reply or audit correspondence on the same point.

If you do not reply

  • The officer can serve a show cause notice under section 73, 74 or 74A, summarised in Form DRC-01, for the whole amount with interest and penalty.
  • The chance to pay before the notice, with no penalty in a non-fraud case, is then gone. After the notice, a section 73 case has 30 days to pay without penalty (section 73(8)) and a non-fraud section 74A case 60 days (section 74A(8)).
  • Once confirmed by an order in DRC-07, an unpaid demand is recoverable under section 79, including from your bank account.

How to structure the reply

  • Reference: GSTIN, the DRC-01A reference number and date, the section and the periods.
  • Amounts accepted and paid, with the DRC-03 ARN and date.
  • Each amount disputed in turn: why it is not payable, and the documents.
  • Where Part A invokes the fraud limb, why there was no fraud, wilful misstatement or suppression.
  • A request to accept the payment and submissions in Part C and issue no show cause notice for the amounts explained.

Common questions

What is DRC-01A in GST?

An intimation under rule 142(1A) of the CGST Rules, in which the proper officer communicates, before serving a show cause notice under section 73, 74 or 74A, the tax, interest and penalty he has ascertained. Part A is the officer’s intimation, Part B your reply, and Part C the officer’s acceptance of the payment or submissions.

Is DRC-01A mandatory before a show cause notice?

Not since 15 October 2020. When rule 142(1A) was inserted on 9 October 2019 it said the officer “shall” communicate the amount; it now says “may”. A show cause notice can therefore be issued without a DRC-01A first.

Do I have to pay the amount in DRC-01A?

No. You can pay all of it, pay part and object to the rest, or object to all of it in Part B. Payment is made through Form DRC-03, and the portal issues an acknowledgement in Form DRC-04.

Does paying after DRC-01A avoid the penalty?

In a non-fraud case, yes: paying the tax and interest before the show cause notice means no notice for that amount and no penalty (sections 73(5) and 74A(8)). Where fraud or suppression is alleged, the penalty is 15% of the tax (sections 74(5) and 74A(9)). The exception: where self-assessed tax, or tax collected, was not paid within 30 days of its due date, the penalty of 10% of the tax or ₹10,000, whichever is higher, applies anyway (sections 73(11) and 74A(11)).

Other notices

Before you rely on this

An explanation of the rules, not advice on your notice. The date printed on your notice governs, and a demand of any size deserves a CA or an advocate before you reply.