GSTN has issued an advisory for taxpayers to use the new functionality on the GST portal for online compliance related to input tax credit (ITC) mismatch between GSTR-2B and GSTR-3B. This functionality will enable taxpayers to provide explanations for ITC differences online through a simplified process in compliance with GST Council directives.
Automated Intimation in Form GST DRC-01C
i) GSTN has developed a new functionality to generate automated intimations in Form GST DRC-01C when there is a significant difference between ITC available in GSTR-2B and ITC claimed in GSTR-3B.
ii) This feature compares ITC declared in GSTR-3B/3BQ with ITC available in GSTR-2B/2BQ for each tax period.
iii) If the claimed ITC exceeds available ITC beyond a predefined limit, the taxpayer receives a DRC-01C intimation.
Taxpayer Response in Form DRC-01C Part B
i) Upon receiving DRC-01C, the taxpayer must respond using DRC-01C Part B within the stipulated time.
ii) The taxpayer can either make payment to settle the ITC difference using DRC-03, provide an explanation for the difference, or use both options.
Consequences of Non-Response
i) GSTN has reiterated that if no response is filed in DRC-01C Part B, the taxpayer will not be allowed to file subsequent GSTR-1/IFF.
ii) This measure will prevent misuse of input tax credit.
The new functionality for online ITC reconciliation through DRC-01C will enhance compliance and reduce tax leakage. Taxpayers should respond diligently to any intimation received to avoid disruption in return filing.