Introduction: As of November 14, 2023, the Goods and Services Tax Network (GSTN) has introduced a crucial feature to address discrepancies in Input Tax Credit (ITC) reporting. This advisory aims to guide taxpayers through the process of rectifying mismatches between ITC available in GSTR-2B statements and ITC claimed in GSTR-3B returns.
Automated Intimation in Form GST DRC-01C: GSTN has rolled out a functionality in the form of automated intimation, accessible on the GST portal. This tool empowers taxpayers to explain variations in ITC, ensuring transparency and adherence to GST Council directives.
Comparison of ITC in GSTR-3B/3BQ and GSTR-2B/2BQ: The newly implemented functionality meticulously compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. Should the claimed ITC in GSTR-3B exceed the available ITC in GSTR-2B beyond a predefined limit or percentage difference, taxpayers will receive an intimation in the form of DRC-01C.
Response Filing Using Form DRC-01C Part B: Upon receipt of an intimation, taxpayers are required to file a response using Form DRC-01C Part B. They have the flexibility to either provide details of the payment made to settle the difference using Form DRC-03 or furnish an explanation for the disparity. Alternatively, taxpayers can opt for a combination of both options.
Consequences of Non-Compliance: Failure to file a response in Form DRC-01C Part B may lead to consequences. Impacted taxpayers who neglect this step will be unable to file their subsequent period GSTR-1/IFF, emphasizing the critical importance of timely compliance.
Conclusion: In conclusion, the introduction of the GST DRC-01C functionality signifies a proactive approach by GSTN to streamline compliance and address ITC discrepancies promptly. Taxpayers are urged to familiarize themselves with this process, respond promptly to intimation, and ensure uninterrupted filing of subsequent GSTR-1/IFF. Stay informed, stay compliant, and navigate the complexities of GST seamlessly. Thank you for your cooperation.
Difference in Input Tax Credit (ITC) available in GSTR-2B & ITC claimed in the GSTR-R3B
1. It is informed that GSTN has developed a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by the GST Council. This feature is now live on the GST portal.
2. This functionality compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. If the claimed ITC in GSTR 3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C.
3. Upon receiving an intimation, the taxpayer must file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both options.
4. In case, no response is filed by the impacted taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR-1/IFF.