NEW GST RETURN COMPLIANCE

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To understand this you have to first read Rule 88C of CGST Rules, interested in December 2022

Rule 88 C. Manner of dealing with difference in liability reported in statement of outward supplies and that reported in return.

(1) Where the tax payable by a registered person, in accordance with GSTR-1/IFF, exceeds the amount of tax payable by such person GSTR-3B for that period furnished by him, by such amount and such percentage, as may be recommended by the Council, the said registered person shall be intimated of such difference in Part A of FORM GST DRC-01B, electronically on the common portal, and a copy of such intimation shall also be sent to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said difference and directing him to—

(a) pay the differential tax liability, along with interest under section 50, through FORM GST DRC-03; or

(b) explain the aforesaid difference in tax payable on the common portal,

within a period of 7 days.

(2) The registered person referred to sub-rule (1) shall, upon receipt of the intimation referred to in that sub-rule, either,-

(a) pay the amount of the differential tax liability, as specified in Part A of FORM GST DRC-01B, fully or partially, along with interest under section 50, through FORM GST DRC-03 and furnish the details thereof in Part B of FORM GST DRC-01B electronically on the common portal; or

(b) furnish a reply electronically on the common portal, incorporating reasons in respect of that part of the differential tax liability that has remained unpaid, if any, in Part B of FORM GST DRC-01B,

within the period specified in the said sub-rule.

Now you read the Rule, now you can easily understand this new form DRC-01B

GSTN has developed a functionality to enable the taxpayer to explain the difference in GSTR-1 & 3B return online as directed by the GST Council. This feature is now live on the GST portal.

The functionality compares the liability declared in GSTR-1/IFF with the liability paid in GSTR-3B/3BQ for each return period. If the declared liability exceeds the paid liability by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01B.

Upon receiving an intimation, taxpayer must file a reply in Form DRC-01B Part B, providing clarification through reason in automated dropdown and details regarding the discrepancy.

It is mandatory to submit a reply of DRC-01B otherwise GSTR-1 will be blocked for next filing period and unblock only when DRC-01B reply will be submitted

When can Form DRC-01B be filed?

The system checks the spike between the liability declared in form GSTR-1/IFF and the liability paid in GSTR-3B/3BQ for each return period.

If the liability declared in GSTR-1 exceeds the liability paid in Form GSTR-3B by a pre-defined limit for a return period or the percentage difference between the liabilities declared in GSTR-1 exceeds the configurable percentage threshold from the liability paid in Form GSTR-3B for a return period, an intimation is sent to you.

Once you receive an intimation in Form DRC-01B, i.e., if there is a difference between the liability declared in GSTR-1/IFF and that paid through GSTR-3B/3BQ beyond the configurable threshold limit, you need to submit your reply in Form DRC-01B Part B.

Note: If a taxpayer doesn’t file response to Form GST DRC-01B for previous tax period, then for the subsequent tax period, they will not be able to file their Form GSTR-1/IFF.

On which class of taxpayers is Form DRC-01B applicable?

Form DRC-01B is applicable to various types of taxpayers, including regular taxpayers (including SEZ units and SEZ developers), casual taxpayers, and taxpayers who have opted in or opted out of the composition scheme.

I have not filed the Form DRC-01B for the previous Tax period. Can I still file GSTR1/IFF for the current Tax period?

If you have not filed Form DRC-01B Part B for any period for which you received an intimation in Form DRC-01B Part A, you will not be able to file GSTR-1/IFF for the subsequent period. It is important to ensure timely filing of Form DRC-01B Part B to avoid any interruptions in the filing of GSTR-1/IFF.

How will I be intimated that I have to submit reply in Form DRC-01B Part B?

Once the intimation in Form DRC-01B Part A is generated, a Reference Number will be assigned. You will receive the intimation via email and SMS, which will include the Reference Number. Please ensure to check both your email and mobile messages for the intimation and keep the Reference Number handy for future reference and correspondence. Note: You can also check this intimation on GST Portal. Navigate to Services > Returns > Return Compliance > Liability Mismatch DRC-01B.

Can Form DRC-01B Part B be filed monthly or quarterly?

For quarterly filers (QRMP), Form DRC-01B will be generated, if applicable, after filing the quarterly GSTR-3B. On the other hand, for monthly filers, Form DRC-01B will be generated on a monthly basis after filing the monthly GSTR-3B. Therefore, Form DRC-01B Part B can be filed either on a monthly or quarterly basis, depending on the frequency of filing GSTR-3B.

After filing the reply for DRC-01B Part B, how much time will it take to unblock the form GSTR-1/IFF? When will I be able to file GSTR-1/IFF?

After filing the reply for DRC-01B Part B, you can instantly file GSTR-1/IFF. If you are facing any issue while filing GSTR-1/IFF, then you need to log out and log in again after a few minutes.

While entering the ARN for filing the reply for DRC-01B Part B, I am getting an error message stating that ‘Please provide valid ARN of DRC-03’. Why am I getting this error message?

If you encounter an error message while entering the ARN to file the reply for DRC-01B Part B, please check the following points:

• Ensure that the ARN is valid and corresponds to the same DRC-03 and GSTIN.

• The DRC-03 should have been filed on or after the date when DRC-01B Part A was issued.

• Confirm that the cause of payment specified in the DRC-03 is “Liability mismatch – GSTR1 to GSTR-3B.”

• The overall tax period should align with the period for which DRC-01B Part A was issued.

• For monthly filers, the period should be the same, including both the “From” and “To” dates. • For quarterly filers, it should cover at least one month within the quarter.

How can I deselect any reason for the payment difference, after providing the details for the reason selected earlier?

If you deselect any reasons for difference after providing the details, the system will display an error message, requesting for deletion of details already provided. So, after deleting the details entered for the reason selected earlier, you will be able to deselect that reason.