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The GSTN vide Advisory No. 614 dated November 14, 2023, has intimated about a new functionality on the GSTN Portal to generate automated intimation in Form GST DRC-01C.
The said functionality intends to compare the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. If the ITC claimed in GSTR 3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold or predefined limit, then the taxpayer will receive an intimation in the form DRC-01C.
In response to the same, either the taxpayer can opt to
However, if no response is filed by the taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR-1/IFF returns.
ITC mismatch can happen due to several reasons, some of which are listed below:
While there is no doubt that the said advisory is driven by the goals of simplifying processes, reducing legal disputes, and providing greater clarity on ITC mismatch issue, but at the same time it blocks the clock as the action time on DRC is short and missing the due date may result into blocking of GSTR-1 facility for the subsequent month, thereby causing working capitals hiccups. Accordingly, now the taxpayers are urged to familiarize themselves with this new process, and to respond promptly to the said intimation and ensure the reconciliations are ready in case of ITC claimed in excess of that appearing of GSTR-2B of that month.
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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