GST notice Form DRC-01A: pre-SCN intimation reply guide

Receiving communication from the GST department often causes immediate alarm. However, an intimation in Form GST DRC-01A is not a formal demand order or a confirmed liability. It is an opportunity under the law to resolve tax discrepancies before costly litigation begins. Understanding how to interpret the notice and file your reply protects your business from unnecessary penalties and recovery actions.

Legal nature of Form GST DRC-01A: why it is an intimation and not a show cause notice

Form GST DRC-01A is issued under Rule 142(1A) of the CGST Rules, 2017. Under this provision, the proper officer communicates the details of any tax, interest, and penalty ascertained before serving a formal notice under Section 73(1), Section 74(1), or Section 74A(1) of the CGST Act.

Because DRC-01A is an advisory intimation rather than an adjudication notice, it does not immediately create a demand on your electronic liability ledger. A formal show cause notice requires a summary in Form GST DRC-01 under Rule 142(1)(a), which initiates formal quasi-judicial proceedings. In contrast, DRC-01A serves as a statutory filter designed to encourage early settlement and reduce avoidable disputes.

Structure of Form GST DRC-01A: Part A versus Part B

The intimation framework consists of two complementary segments prescribed in the GST rules:

Part A represents the initial communication issued by the proper officer. It contains the case proceeding reference number, the tax period involved, the statutory section invoked, and a table quantifying proposed tax, interest under Section 50, and penalty across CGST, SGST, IGST, and Cess heads. The officer attaches detailed grounds explaining the basis of the ascertainment.

Part B represents the reply submitted by the taxpayer under Rule 142(2A) of the CGST Rules. It allows you to report voluntary discharge of liability or set out detailed submissions contesting the proposed demand with supporting evidence.

Three options available to the taxpayer upon receiving DRC-01A

When you receive Form GST DRC-01A, evaluate your inward supply records, purchase register, and return filings to choose one of three procedural courses:

Option 1: full acceptance and voluntary payment via Form DRC-03

If the discrepancy identified by the officer is factually correct, such as an omitted outward invoice or an inadvertent claim of blocked credit under Section 17(5), prompt payment yields significant statutory benefits:

In cases under Section 73(5), paying the ascertained tax together with interest under Section 50 before service of notice ensures zero penalty under Section 73(6). In matters under Section 74(5) involving suppression or wilful misstatement, settling before notice restricts the penalty to 15 percent of the tax amount, avoiding the full 100 percent penalty applicable after formal adjudication. Discharge the amount using Form GST DRC-03 for voluntary payment, selecting the appropriate cause of payment, and report the payment reference in Part B.

Option 2: partial acceptance of liability

In many audits, the officer's ascertainment combines genuine liabilities with defensible discrepancies. For instance, you might agree with a minor clerical tax shortfall but disagree with an alleged input tax credit mismatch. In this scenario:

1. Deposit the undisputed tax amount along with applicable interest through Form GST DRC-03.
2. In the Part B response, select the clause confirming partial discharge to the extent of the paid amount, quoting the ARN of the DRC-03.
3. Attach detailed legal and factual rebuttals for the remaining disputed balance.

Option 3: total disagreement and point-by-point defense

If the proposed demand is unfounded, you should contest the intimation in its entirety. Common grounds for total disagreement include:

Timing differences in GSTR-2B occur frequently when invoices are reported late by suppliers in subsequent tax periods. Credit remains legitimately claimable under Section 16(2) once visible. Similarly, reverse charge demands often arise when tax was already discharged in cash in Table 3.1(d) of GSTR-3B and corresponding credit claimed under Table 4(A)(3). Another frequent scenario involves clerical misclassifications where ineligible credit was auto-populated into scrutiny alerts despite being correctly reversed in Table 4(B) of Form GSTR-3B.

Worked example: responding to an input tax credit discrepancy intimation

Consider an enterprise, Horizon Tools Private Limited, that receives Form GST DRC-01A Part A from the jurisdictional proper officer proposing a demand of ₹1,80,000 integrated tax for Financial Year 2022-23.

The officer alleges that ITC claimed in Table 4(A)(5) of Form GSTR-3B exceeded the credit available in Form GSTR-2B. Upon conducting a monthly reconciliation against its audited purchase register, the company discovers the following breakdown:

The company pays ₹40,000 plus interest of ₹12,400 via Form GST DRC-03, then files Form GST DRC-01A Part B detailing the reconciliation tables for the remaining ₹1,40,000. Under Rule 142(2A), the officer accepts the explanation and drops the disputed demand, avoiding a formal show cause notice.

Step-by-step portal filing procedure for DRC-01A Part B

Filing your reply requires strict adherence to portal navigation steps verified on the official GST common portal user manuals:

1. Navigate to case dashboard: Log in to the GST portal. Open the Services tab, choose User Services, then click View Additional Notices and Orders.
2. Open intimation details: Click View against the relevant Case ID. Select the Notices tab to download the intimation along with its annexures.
3. Draft reply in Part B: Under the case window, open the Replies tab and click Add Reply to access the Part B interface.
4. Select response type: Choose whether you are reporting partial payment or communicating total disagreement.
5. Enter payment details or reasons: If tax was paid via DRC-03, enter the ARN of the payment. If contesting, enter concise reasons in the text box.
6. Upload reconciliation documents: Attach your reconciliation statement, tax invoices, ledger copies, and bank statements in PDF format within portal size limits.
7. Authenticate and submit: Select the authorized signatory, check the declaration box, and file using DSC or EVC to generate an acknowledgement reference number.

Draft reply template for Form GST DRC-01A Part B

Below is a factual draft structure suitable for attaching to the electronic Part B submission:

Legal consequences of ignoring Form GST DRC-01A

Ignoring an intimation in Form GST DRC-01A is one of the most expensive mistakes an accounts department can make. While DRC-01A itself does not create a recoverable attachment, failure to respond has predictable statutory consequences:

The proper officer will proceed to issue a formal show cause notice under Section 73(1), Section 74(1), or Section 74A(1) in Form GST DRC-01. Once a formal notice under Section 73(1) is served, the window to close proceedings with zero penalty under Section 73(5) expires. Even if you pay within 30 days of the notice, you may face mandatory statutory penalty provisions. In addition, persistent non-response results in an order under Section 73(9) or Section 74(9) summarized in Form GST DRC-07, creating an enforceable demand on your electronic liability ledger followed by recovery proceedings under Section 79.

Related guides

• GST notice Form DRC-01D: recovery under Rule 142B and how to file reply
• GST notice form DRC-01C Part B reply format: reasons for difference
• How to Reply to Form DRC-01C ITC Mismatch Notice: step-by-Step Playbook
• GST notice Form REG-17 cancellation reply format guide

Frequently asked questions

Last checked: 19 October 2026. Sources: CBIC Tax Information Portal, GSTN Portal User Manuals.