Key points
- What triggers it: tax payable as per GSTR-1/1A/IFF exceeds tax in GSTR-3B for the period by more than the amount and percentage the Council recommends (rule 88C(1)).[1]
- Reply in 7 days in Part B of DRC-01B: pay fully or partly with interest through DRC-03, and/or give reasons for what you don't pay.[1]
- Block: until you pay or reply, you cannot file GSTR-1 or IFF for a later period (rule 59(6)(d)).[2]
- No reply or a rejected reply: the unpaid amount is recoverable under section 79.[1]
- The ITC version is DRC-01C (rule 88D), for ITC in GSTR-3B above GSTR-2B.[3]
What DRC-01B says
Rule 88C was inserted by Notification 26/2022-CT and extended to GSTR-1A by Notification 12/2024-CT.[1] The portal compares, for each return period, the liability you declared in GSTR-1, GSTR-1A or IFF with the tax you reported in GSTR-3B. If the gap is above the threshold, you get Part A of DRC-01B on the portal and by email.[1] GSTN describes the threshold as a predefined limit and a configurable percentage; the exact figures are not published in the rule.[4]
Common reasons for the gap
| Reason | What happened | Typical reply |
|---|---|---|
| Tax paid in another month | An invoice in September's GSTR-1 was paid in August's or October's GSTR-3B | Explain, giving the 3B period where it was paid |
| Advance already taxed | Tax paid on an advance earlier; invoice now in GSTR-1 | Explain: tax paid on advance in an earlier 3B and adjusted |
| Credit note in 3B, not in GSTR-1 | Reduction taken in 3B but the CN wasn't reported | Report the CN in GSTR-1/1A; explain or pay |
| Wrong period or typo in 3B | Liability simply left out of 3B | Pay the difference with interest through DRC-03 |
| Duplicate or wrong invoice in GSTR-1 | Same bill reported twice, or wrong value | Amend in GSTR-1A or a later GSTR-1; explain |
| Tax head mix-up | IGST in GSTR-1, CGST + SGST in 3B (or the reverse) | Explain; ask your CA how to correct the head |
How to reply, step by step
Open the intimation
On the GST portal, open the DRC-01B notice and note the period and the difference shown for each tax head in Part A.
Reconcile the period
List every invoice, debit note and credit note in that period's GSTR-1/1A/IFF and match it with what you reported in GSTR-3B, period by period. Most gaps are timing: tax shown in a neighbouring month.
Pay what is really short
For any genuine shortfall, pay tax with interest under section 50 through DRC-03 and note its reference number.[1]
Worked example, in rupees
Desai Hardware & Paints, Vadodara (sample firm) gets DRC-01B for August 2026. Part A shows CGST + SGST of ₹2,46,400 in GSTR-1 against ₹1,98,400 in GSTR-3B: a gap of ₹48,000. Its accountant finds:
| Item | Tax | Where it is | Action |
|---|---|---|---|
| Invoice VD/1184 of 31-08-2026 | ₹27,000 | In August GSTR-1; tax paid in September 3B by mistake | Explain: paid in September 2026 3B |
| Invoice VD/1102 reported twice | ₹14,400 | Duplicate in August GSTR-1 | Explain; amend through GSTR-1A or a later GSTR-1 Verify |
| Freight bill VD/1150 left out of 3B | ₹6,600 | Not paid anywhere | Pay ₹6,600 + interest via DRC-03 |
| Total | ₹48,000 |
Interest under section 50 runs at 18% a year on tax paid late. For ₹6,600 paid on 25 October, 45 days after the 20 September due date, that is about ₹6,600 × 18% × 45 ÷ 365 = ₹146. Verify Desai files DRC-03 for ₹6,746, then Part B with the DRC-03 reference and reasons for the other ₹41,400, all inside the seven days.
Preventing it
- Prepare GSTR-3B from the same bills as GSTR-1, after GSTR-1 is filed, not from a separate summary.
- Use GSTR-1A to correct GSTR-1 for the period before you file 3B, when a mistake is found.
- Report every credit note in GSTR-1 for the month it is issued, within the time limit.[5]
- Pay tax on late-reported invoices in the 3B of the same period wherever you can, so the periods line up.
What the 57th GST Council proposed
On 8 October 2026 the Council recommended an alternate mechanism to correct liability and ITC in returns: better reconciliation between GSTR-1/1A/IFF and GSTR-3B, a new rule 61(1A) for correcting liability so that 3B aligns with GSTR-1, and a DRC-03 that names the underlying invoice. It is meant to start from the April 2027 return, after public consultation.[6] Until then, rule 88C and DRC-01B work as described above.
How Moharbill helps
- GSTR-1 and GSTR-3B working from the same bills, with a check that the tax in both agrees before you export the JSON. See GST returns.
- Credit notes with deadline alerts, so they reach GSTR-1 in time.
- Your CA has a free seat to review and file.
Frequently asked questions
What is DRC-01B?
An intimation on the GST portal under rule 88C of the CGST Rules, issued when tax payable as per GSTR-1, GSTR-1A or IFF for a period exceeds the tax in GSTR-3B by more than the set limit.
What is the time limit to reply to DRC-01B?
Seven days. Within that time, pay the difference with interest through DRC-03 and report it in Part B, or explain the difference in Part B, or both.
What happens if I don't reply to DRC-01B?
You cannot file GSTR-1 or IFF for a later period until you pay or reply (rule 59(6)(d)), and the unpaid amount can be recovered under section 79.
What is the difference between DRC-01B and DRC-01C?
DRC-01B (rule 88C) is about output tax: GSTR-1 liability above GSTR-3B. DRC-01C (rule 88D) is about ITC: ITC claimed in GSTR-3B above what GSTR-2B shows.
Can I explain the difference instead of paying?
Yes, for the part that has a valid reason, such as tax paid in another period's GSTR-3B. Give the reason and the period in Part B. Pay only what is genuinely short.
Sources
All read on 17 Oct 2026.
- CGST Rules 2017, rule 88C (Notifications 26/2022-CT and 12/2024-CT), CBIC. taxinformation.cbic.gov.in
- CGST Rules 2017, rule 59(6)(d) and (e), CBIC. taxinformation.cbic.gov.in
- CGST Rules 2017, rule 88D (Notification 38/2023-CT), CBIC. taxinformation.cbic.gov.in
- GSTN advisory of 29 Jun 2023 on online compliance for DRC-01B (predefined limit and configurable threshold; Part B reasons), as reported by Taxo, 30 Jun 2023. Secondary source. taxo.online
- CGST Act 2017, section 34(2), CBIC. taxinformation.cbic.gov.in
- PIB, "Recommendations of the 57th Meeting of the GST Council", 8 Oct 2026, para A2.5. gstcouncil.gov.in
Written by the Moharbill team
We build GST billing for distributors at Hexa Secure Labs and write these guides from the rules we code into the product. Spotted something out of date? Tell us and we will fix it within two working days.