What is DRC-01B and DRC-01C?

What each notice is

Both are automatic intimations from the GST portal. Neither is a demand, but ignoring one has consequences.

	DRC-01B	DRC-01C
Compares	Tax in GSTR-1 (or IFF) with tax paid in GSTR-3B	ITC claimed in GSTR-3B with ITC available in GSTR-2B
Raised when	GSTR-1 tax is higher than GSTR-3B tax by more than the set limits	GSTR-3B ITC is higher than GSTR-2B ITC by more than the set limits
Rule	Rule 88C	Rule 88D

The limits are an amount and a share of the tax or credit, recommended by the GST Council and applied by the portal. They are not published in a notification, so treat any figure you see quoted as unofficial.

How to respond

Each notice has two parts. Part A, from the portal, sets out the difference. You reply in Part B, within the time stated in the notice, in one of three ways:

1. Pay the shortfall (DRC-01B) or reverse the excess credit (DRC-01C) through Form DRC-03, with interest, and quote the DRC-03 reference.
2. Explain the difference, for example credit notes, amendments, or invoices the supplier will report next month.
3. Combine the two: pay or reverse part and explain the rest.

If you do not reply in time, the portal blocks your next GSTR-1 or IFF until you file Part B. For a seller with B2B buyers, a blocked GSTR-1 holds up the credit those buyers see.

If you do not pay and your explanation is not accepted, the department can recover the tax shown in your own GSTR-1 directly (DRC-01B), or start proceedings for the excess credit (DRC-01C).

Recent changes

• From the July 2025 tax period, the tax liability that GSTR-3B picks up from GSTR-1, GSTR-1A and IFF cannot be edited in GSTR-3B. Corrections are made through GSTR-1A instead. This removes most new DRC-01B mismatches, but notices on earlier periods still arrive.
• In October 2026 the GST Council recommended further rule changes to reduce liability and ITC mismatches, from returns for April 2027. Until they are notified, the current rules apply.

Why ecommerce sellers get them

The usual causes are timing and data gaps between marketplace reports, books and returns:

• For earlier periods, marketplace returns reduced in GSTR-3B but credit notes not reported in GSTR-1, or reported in a different month.
• Sales for one state reported under another GSTIN.
• GSTR-1 prepared from marketplace tax reports and GSTR-3B from books, with no reconciliation between them.
• ITC on marketplace fees, ads or courier claimed before the supplier's invoice appears in GSTR-2B, or claimed for a GSTIN the invoice was not billed to.
• Supplier invoices rejected or kept pending in the Invoice Management System, which then drop out of GSTR-2B.

How to avoid them

Reconcile every month, before filing GSTR-3B:

1. GSTR-1 against books, state by state, including credit notes for returns.
2. Marketplace tax reports and the operator's GSTR-8 against your sales.
3. ITC in books against GSTR-2B, supplier by supplier, and follow up on missing invoices.

Respond to every notice, even one you think is wrong. A reasoned explanation in Part B is often enough to close it.