Summary: The Demand and Recovery Certificate (DRC-01A) is an intimation issued by a GST officer to a registered person regarding tax-related discrepancies like unpaid or short-paid tax, erroneous refunds, or incorrect input tax credit claims. Issued under Sections 73, 74, or 74A, this intimation is not mandatory before a formal notice (DRC-01) but serves as an initial communication. The registered person can respond to the DRC-01A Part-A in DRC-01A Part-B, explaining their position. If the officer is satisfied with the response, they may issue a closure order in DRC-01A Part-C. If not, or if no reply is received, the officer can proceed with a formal notice in DRC-01. As of the financial year 2024-2025, intimation and notices for new cases will be issued under Section 74A, replacing Sections 73 and 74. The process is governed by Rule 142 of the GST rules. A registered person can request an extension to reply, and even if the time limit expires, the reply can still be submitted on the GST portal. A new DRC-01A Part-A cannot be issued for the same grounds for the same financial year but can be issued for different grounds or years.
Intimation in DRC-01A u/s 73, 74, 74A of GST:-
1.Officer can issued intimation in number of cases:
- Tax not paid
- Tax short paid
- Erroneously refund
- Input tax credit wrongly availed
- Input tax credit wrongly utilised
2. Full form of DRC:
Full form of DRC is Demand & Recovery Certificate.
3. Further action against ASMT-10 reply:
If the officer is not satisfied with the reply furnished in form ASMT-11 or if no reply furnished against ASMT-10, then the officer may issue an intimation in DRC-01A Part-A. However, this is not mandatory.
4. DRC-01A Part-A:
This Intimation will be issued by the GST officer for the above mentioned cases. It is an intimation instead of a notice.
5. Is DRC-01A Mandatory or optional ? :
Before issuing of SCN in DRC-01, officer may issue intimation in DRC-01A Part-A. It is not mandatory to issue intimation before SCN.
6. Applicability of Sections:
DRC-01A Part-A is issued by the officer u/s Sec 73 or 74 or 74A for the above mentioned cases.
7. DRC-01A Part-B:
The registered person will submit the reply in Form DRC-01A Part-B within the prescribed period by explaining the each & every ground raised by the officer:
a. If registered person is aggrieved by the officer then he will submit the reply in DRC-01A Part-B. There is no requirement to pay the taxes through DRC-03.
b. If registered person is partially aggrieved by the officer then he will submit the reply in DRC-01A Part-B along with the payment through DRC-03.
8. DRC-01A Part-C:
a. If officer is satisfied with the reply furnished by the person then he will issue the closure order in Form DRC-01A Part-C & no further action will be taken by the officer.
b. If officer is not satisfied with the reply furnished by the person then he will take the further action by issuing a notice in DRC-01 & he will not pass the order in DRC-01A Part-C.
9. Further actions by the officer:
Further action will be taken by the officer if he is not satisfied with the reply furnished by the registered person in DRC-01A Part-B by issuing a notice in DRC-01 under sub section (1) of the section in which intimation was issued.
10. Time limit for issuing of DRC-01A Part-A:
- Intimation can be issued before issuing of notice in Form DRC-01.
11. Section in which intimation is issued:
| S. No. | Nature | Applicability of Section |
| 1 | DRC-01A Part-A | Non fraud cases: Section 73(5) |
| 2 | DRC-01A Part-A | Fraud cases: Section 74(5) |
| 3 | DRC-01A Part-A | Non fraud cases: Section 74A(8) |
| 3 | DRC-01A Part-A | Fraud cases: Section 74A(9) |
a. Section 73 & 74 are applicable till FY 23-24. Officer can-not issue intimation under these both sections for the FY 24-25 or onwards.
b. Section 74A is applicable from FY 24-25. Officer can issue intimation under this section for the FY 24-25 or onwards.
This means that if officer wants to issue an intimation for FY 24-25 or onwards then he or she will use the Section 74A instead of Sections 73 & 74.
12. Rule 142 for DRC-01A:
| S. No. | Nature | Applicability of Rule 142 |
| 1 | DRC-01A Part-A | Intimation is issued u/r 142(1A) |
| 2 | DRC-01A Part-B | Reply will be filed u/r 142(2A) |
| 3 | DRC-01A Part-C | Closure order is passed u/r 142(2A) |
13. Officer actions against reply furnished:
| S. No. | Reply | Action by the officer |
| 1 | If officer is satisfied with the reply | He will pass the closure order in DRC-01A Part-C |
| 2 | If officer is not satisfied with the reply | He will issue the DRC-01 u/s 73(1) or 74(1) or 74A(1) |
| 3 | If no reply furnished | He will issue the DRC-01 u/s 73(1) or 74(1) or 74A(1) |
a. Section 73 & 74 are applicable till FY 23-24. Officer can-not issue notice under these both sections for the FY 24-25 or onwards.
b. Section 74A is applicable from FY 24-25. Officer can issue notice under this section for the FY 24-25 or onwards.
This means that if officer wants to issue the notice for FY 24-25 or onwards then he or she will use the Section 74A instead of Sections 73 & 74.
14. Time petition for extension of time:
a. A person can file an application of extension of time to submit a reply to the intimation.
b. There is no separate form prescribed for this.
c. It will be filed in form DRC-01A Part-B.
15. Expiry of time:
If the time period for filing a reply to the intimation has expired, the reply can still be submitted on the GST portal. In such cases, there is no need to submit it physically at the GST office or send it via email to the concerned GST officer.
16. If reply not furnished within the time:
If DRC-01 is issued before submission of a reply in Part-B, then the reply cannot be furnished in Part-B.
17. Additional points:
a. DRC-01A Part-A cannot be issued again for the same grounds for the same financial year.
b. DRC-01A Part-A can be issued again for different grounds for the same financial year.
c. DRC-01A Part-A can be issued for one year. For different years, separate intimation will be issued by department.
21. Above pictures relate to section 73, where the officer issued an intimation for non-fraud cases.
22. Refer to the article: ASMT-10 Notice u/s 61 of GST:-
23. The notice in Form DRC-01 will be discussed in a separate article.
*****
If you have any queries, you can reach the author by email at caashishsingla878@gmail.com or by phone at 9896478194.
Disclaimer: The views and opinions expressed in this article are those of the author. This article is intended for general information purposes only and does not constitute professional advice. Readers are strongly advised to consult a qualified professional for guidance specific to their individual situation before making any financial, legal, or tax-related decisions. The author shall not be held liable for any loss or damage of any kind incurred as a result of the use of this information or for any actions taken based on the content of this article.
Author Bio
sir, if drc01a issued and tp not replied, no need for reply in part cc. If reply given in part b, officer has to give reply. Though the word ‘may’ is used, it will become ‘shall’ as per SC interpretation of these wordings. If reply not given, what is the use of it. Waste of time. Can issued notice, but no option to give reply in part-c in the back office of both state and CBIC
Dear, if we do not file the reply in Part-B, then it is our default. Why would it be considered a waste of time? The department will proceed further through DRC-01, and then we will have to file the reply against DRC-01. It is our fault if we fail to file the reply in Part-B, and that is why this option is disabled. The word “may” is used in the Act, but if the officer is satisfied with the reply, then he shall pass the order in Part-C, which is what we are practically doing.