Received a DRC-01B? How to Reply Within 7 Days to a GSTR-1 vs GSTR-3B Liability Mismatch
By GST Reco Pro
GST Reco Pro builds browser-based tools for GST and TDS reconciliation, used by Chartered Accountants and corporate tax teams across India.
DRC-01B is the system intimation under Rule 88C when the tax liability in GSTR-1 exceeds what was paid through GSTR-3B. You have seven days to pay, explain, or do both, and ignoring it blocks your next GSTR-1. Here is how to build the reply.
DRC-01B is not a show-cause notice. It is a system-generated intimation under Rule 88C of the CGST Rules, sent when the tax liability declared in GSTR-1 (or IFF) for a period exceeds the liability paid through GSTR-3B for the same period by more than the notified threshold. It arrives on the portal, by email and by SMS. Its purpose is to make you either pay the gap or explain it before the department treats it as tax short-paid.
It is cheap to answer and expensive to ignore. If no reply is given within the time allowed, the portal blocks the next GSTR-1 or IFF under Rule 59(6), and the amount can be recovered without the usual notice process.
Your three options in Part B
| Option | When it fits | What you do |
|---|---|---|
| Pay the difference | The gap is real: tax was reported in GSTR-1 but not paid in GSTR-3B | Pay through DRC-03 with interest, then quote the DRC-03 reference in Part B |
| Explain the difference | The gap is a timing or reporting difference, not unpaid tax | Give a reasoned explanation in Part B with supporting documents |
| Pay part, explain the rest | Part of the gap is real and part is explainable | Pay the real portion through DRC-03 and explain the remainder |
The reply is due within seven days of the intimation. Treat the seven days as a hard deadline for the whole exercise, including the reconciliation.
Common legitimate explanations
Most DRC-01B gaps come from the way returns are reported, not from unpaid tax. The usual ones:
- Tax already paid in another period. The liability was discharged in an earlier or later GSTR-3B, for example on advances received before the invoice, or as a catch-up the following month.
- Amendments reported in a different period. A GSTR-1 amendment shows up in the period it was filed, not the period of the original invoice, so one period looks overstated and another understated.
- Duplicate or erroneous GSTR-1 entries. An invoice reported twice, or reported with the wrong value, and corrected later. The correction needs to be shown, not just asserted.
- Credit notes. Credit notes reported in GSTR-1 in one period and adjusted in GSTR-3B in another.
- Out-of-sequence filing. A GSTR-1 filed after the GSTR-3B for the same period. Hard-locking of GSTR-3B liability from the July 2025 tax period makes new gaps rarer, because Table 3 is filled from GSTR-1. But it cannot fill a GSTR-3B from a GSTR-1 that did not yet exist, and older periods are unaffected.
Building the reconciliation worksheet
An explanation is only as good as the numbers behind it. Build a worksheet covering the period in the intimation and, usually, the periods either side of it, with one row per month and these columns:
- Tax by head (IGST, CGST, SGST, cess) as reported in GSTR-1, including GSTR-1A.
- Net amendments and credit notes reported in the month, separately from original invoices.
- Tax by head paid through GSTR-3B Table 3.1.
- The difference, by head.
- The cause of each difference, with the invoice or document numbers that support it.
- Where tax was paid in a different month, the month and the GSTR-3B that shows it, so the differences across periods net to zero.
After you reply
Keep the worksheet, the supporting documents and the reply together on the client file. If the explanation is not accepted, the matter moves into the regular adjudication process, and the same papers become the starting point of your defence. Courts have looked closely at whether a demand based on a GSTR-1 versus GSTR-3B difference was preceded by a proper DRC-01B process, so the record of your reply matters beyond the intimation itself.
The worksheet starts with each month's GSTR-1 and GSTR-3B side by side. GST Reco Pro converts both returns into one Excel workbook with tax by head for every month, entirely in your browser, so the reconciliation fits inside the seven days.
Convert GSTR-1 and GSTR-3B PDFs to Excel →Related reading: why GSTR-1 and GSTR-3B drift apart in the first place, and how to stop it before filing.
Read the GSTR-1 vs GSTR-3B mismatch guide →Received the ITC-side intimation instead? DRC-01C works the same way for GSTR-3B versus GSTR-2B.
Read the DRC-01C reply guide →Frequently Asked Questions
What is DRC-01B in GST?
DRC-01B is a system-generated intimation under Rule 88C of the CGST Rules. It is issued when the tax liability declared in GSTR-1 or IFF for a period exceeds the liability paid through GSTR-3B for that period by more than the notified threshold.
How many days do I have to reply to DRC-01B?
Seven days from the intimation. In Part B of the form you either pay the difference through DRC-03 and quote the reference, explain the difference with supporting documents, or pay part and explain the rest.
What happens if I do not reply to DRC-01B?
The portal blocks filing of your next GSTR-1 or IFF under Rule 59(6) until you respond, and the amount can be recovered from you as tax.
Do I have to pay interest when paying a DRC-01B difference?
Yes. If the difference is tax that was short-paid, it is paid through DRC-03 along with interest under Section 50 for the period of delay.