The Goods and Services Tax Network (GSTN), on 14th November 2023 has informed that the most awaited Form GST DRC-01C is active on the GST Portal. The GSTN issued an advisory based on that is states as follows:
“It is informed that GSTN has developed a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by the GST Council. This feature is now live on the GST portal.
This functionality compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. If the claimed ITC in GSTR 3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C.
Upon receiving an 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, or even choose a combination of both options.
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.”
Background
During the 50th GST Council meeting on July 11, 2023, a novel approach to address Input Tax Credit (ITC) mismatches between Form GSTR-2B and Form GSTR-3B was proposed. Subsequently, on August 4, 2023, CGST Rule 88D was officially announced through CGST Notification 38/2023. This rule empowers the GST system to automatically notify taxpayers of significant ITC discrepancies between these two returns.
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