Spoke · notice response

A DRC-01B landed. Reconcile GSTR-1 to GSTR-3B, in seven days

The short answer

A DRC-01B is auto-issued under Rule 88C when the liability you declared in GSTR-1/IFF exceeds the liability you paid in GSTR-3B "by such amount and such percentage, as may be recommended by the Council" — the Rule itself states no figure. The 48th GST Council recommended, to begin with, a difference of more than 20% as well as more than Rs 25 lakh; GSTN's own FAQ describes the live portal trigger only as "a pre-defined limit" that is configurable and unpublished. You have seven days to pay the difference with interest through DRC-03, or explain it in Part B. Miss it and Rule 59(6)(d) blocks your next GSTR-1 — and an unpaid, unexplained excess is recoverable under Section 79 with no show-cause notice first.

DRC-01B is the outward-liability twin of DRC-01C. It fires when the tax you declared in GSTR-1 runs ahead of the tax you actually paid in GSTR-3B. Like its sibling, the rule itself fixes no figure — but unlike the folklore around it, there is a real, dated Council recommendation behind the number people quote. And unlike its sibling, an unresolved gap here goes straight to recovery, not to a show-cause notice.

Do this first

You have seven days, and most of that time should go on reconciliation rather than on the reply itself. Work in this order:

Pull three files — the filed GSTR-1 (or IFF) for the period, the filed GSTR-3B Table 3.1, and your books' outward tax register for the same month.
Find the gap at document level. Do not reply from a summary difference. Identify the invoices, credit notes or amendments that account for the number the portal is quoting.
Decide which side is wrong. This is the whole job. If GSTR-1 overstates, no tax is due — you amend the document in a later GSTR-1 and your Part B explains it. If GSTR-3B underpaid, you owe tax with interest and pay it via DRC-03.
File Part B with the explanation, the payment reference, or both.

Most controllers get this backwards. They assume a DRC-01B means underpaid tax and pay the difference to make the notice go away. Frequently the tax was never due — GSTR-1 was simply reported wrong, or the difference is a reconciling item that was always going to be there.

What actually triggers it

Rule 88C compares one number against one number: the outward liability you declared in GSTR-1/IFF, against the liability you discharged in GSTR-3B for the same period. No officer reviews it first. It is a rules-engine output.

Governing provision — Rule 88C, CGST Rules (inserted by Notification 26/2022-Central Tax, w.e.f. 26 December 2022). Where tax payable per GSTR-1/IFF exceeds tax payable per GSTR-3B for that period "by such amount and such percentage, as may be recommended by the Council", the person is intimated in Part A of FORM GST DRC-01B and directed to pay the differential liability with interest under Section 50 through FORM GST DRC-03, or explain the difference, within a period of seven days. (Position as of July 2026.)

Read that once more. The Rule itself states no number — but that does not mean no figure exists on the record, and it does not mean the figure everyone quotes is contaminated folklore from a different rule. Both of those claims have circulated, and both are wrong.

The Rule delegates; it does not fix a figure. "Such amount and such percentage, as may be recommended by the Council" is the identical formula used by the ITC-side sibling, Rule 88D / DRC-01C. Neither rule's own text states an operative threshold.
But the Council did recommend a figure for Rule 88C, specifically. The 48th GST Council, at its meeting of 17 December 2022 (Signed Minutes, paras 8.11.2 and 8.11.7), recommended, "to begin with," a difference of more than 20% as well as more than Rs 25 lakh — both limbs together, not either one, and not "whichever is lower". That is a real, dated, primary-sourced Council recommendation, not folklore.
The Rule 88D figure is a separate recommendation, from a separate meeting. The 50th GST Council later recommended the same 20%-and-Rs-25-lakh structure for the ITC side, under Rule 88D. Two rules, two Council meetings, the same numbers by parallel drafting instruction — this was never one figure mislabelled onto two rules, and it is not correct to say either rule "has no figure" or that the pair "belongs only" to the other one.
What the live portal actually runs is not published. GSTN's own DRC-01B FAQ describes the operative trigger only as "a pre-defined limit" or "the configurable percentage threshold" — language that does not commit to the Council's cumulative 20%-and-Rs-25-lakh test, and that can be retuned by GSTN without any public instrument.

How to use the figure. Cite "20% and Rs 25 lakh" as the 48th Council's recommendation, attributed and dated — not as the text of Rule 88C, and not as a number you can rely on the live system to apply exactly. The Rule fixes no figure, the Council's recommendation is real, and the configurable portal setting behind it is unpublished; all three of those things are true at once, and none of them cancels the others. Reconcile the gap to zero, or to named reconciling items, and which figure is currently live stops mattering.

A worked example

Take a manufacturer filing for a single GSTIN, with a Rs 40 lakh gap on a Rs 1.8 crore declared liability. All figures are tax, not taxable value — the comparison is on tax. What matters is not whether that gap clears some threshold, but what it is made of:

Component	Amount	Which side is wrong	Action
Two export invoices with payment of tax, reported in GSTR-1, omitted from 3B Table 3.1(b)	Rs 26,00,000	GSTR-3B — genuinely underpaid	Pay via DRC-03 with interest
One B2B invoice keyed twice in GSTR-1	Rs 9,00,000	GSTR-1 — overstated	Amend in a later GSTR-1; explain in Part B
Advance received last month, tax already paid in the earlier 3B, invoice raised this month	Rs 5,00,000	Neither — timing	Explain in Part B

Only Rs 26 lakh of the Rs 40 lakh is real tax. A controller who pays the whole Rs 40 lakh to close the notice has overpaid by Rs 14 lakh and then has to chase a refund for it. This is why step 2 — find the gap at document level — is not optional.

The inverse case deserves a warning. A large book can carry a gap in absolute rupees that never draws an intimation, because whatever percentage the portal is configured to apply is not met. No DRC-01B does not mean no exposure; it means an automated interlock did not fire. Declared-but-unpaid liability remains recoverable, and an officer reaching it later extends no seven-day courtesy.

Why the two figures legitimately differ

GSTR-1 and GSTR-3B are not built to be identical. Several differences are structural and correct, and Part B exists precisely so you can say so.

Cause	Real shortfall?	What to do
Supplies attracting reverse charge — reported in GSTR-1 as outward supplies, but the tax is the recipient's to pay	No	Explain: liability sits with the recipient, not with you
Tax on an advance paid in an earlier GSTR-3B; the invoice appears in a later GSTR-1	No	Explain the timing and point to the earlier 3B
Credit note issued and reported after the 3B for the period was filed	No	Explain; the reduction lands in the next cycle
GSTR-1 amendment raising an invoice value, 3B never updated	Usually yes	Pay the incremental tax via DRC-03 with interest
Invoice reported in GSTR-1, liability simply missed in Table 3.1	Yes	Pay via DRC-03 with interest
Duplicate or wrongly-valued invoice in GSTR-1	No — GSTR-1 is overstated	Amend it in a later GSTR-1, then explain in Part B

Notice the split. Roughly half the recurring causes are fixed on the GSTR-1 side and cost nothing. The other half are real tax and carry interest under Section 50 of the CGST Act, notified at up to 18% per annum — so on the Rs 26 lakh in the worked example, every month of delay is material, and the seven days you spend reconciling are cheap by comparison.

The reply itself

Part A is the intimation the portal generates; Part B is your reply. You can pay part of the difference and explain the rest — a mixed response is the normal case, not an exception. Keep the working paper that maps the gap to specific documents; if the matter is ever picked up later, that reconciliation is your evidence.

On mechanics, GSTN's DRC-01B guidance is explicit: the reply is filed in Part B by selecting a reason from an automated dropdown, with a free-text field for anything the dropdown doesn't cover. Use it. A dropdown code with no document narrative behind it is not an explanation.

Fix the right side — and mind which window is still open

Choosing the instrument is not a style question — since the outward-liability tables of GSTR-3B stopped being editable, it determines whether the correction is possible at all.

Per GSTN's advisory of 7 June 2025, Tables 3.1 and 3.1.1 of GSTR-3B are non-editable from the July 2025 tax period, and corrections to auto-populated outward liability are to be made through GSTR-1A. (Table 3.2 followed separately, non-editable from the November 2025 tax period, per the advisory of 5 December 2025 — a different table, a different date; do not conflate the two.) That changes the workflow in one concrete way: you can no longer quietly type a different number into 3B to square the two returns. The correction has to go upstream.

The trap. GSTR-1A is only open between filing GSTR-1 and filing GSTR-3B for the same period — it closes the moment that 3B is filed. A DRC-01B can only arise after the 3B is filed, because the comparison needs both returns. So by the time the intimation reaches you, GSTR-1A for that period is gone. GSTR-1A is how you prevent a DRC-01B; it is not how you answer one.

GSTR-1 was wrong (overstated). No tax is due. Amend the document through Table 9/10 of a subsequent GSTR-1, subject to the Section 37(3) cut-off — no rectification after 30 November following the financial year, or the date of furnishing the relevant annual return, whichever is earlier. Your Part B explains the overstatement and flags the amendment.
GSTR-3B underpaid genuine liability. GSTR-1 stands; pay the tax with interest through DRC-03, as Rule 88C(1)(a) itself directs, and cite the payment in Part B.
Neither is wrong. A reverse-charge supply, an advance already taxed, a credit note in flight. Explain, with the document references.

What happens if you ignore it

Your next GSTR-1 is blocked. Rule 59(6)(d) bars you from furnishing GSTR-1 or using the IFF for a subsequent tax period where a Rule 88C intimation has issued and you have neither deposited the amount nor furnished a reply in Part B. The bar lifts on either payment or an accepted explanation — it is silence that blocks filing, not the size of the gap. That is not a private problem either way: your customers cannot see those invoices in their GSTR-2B until you file, so their credit stalls too, and you will hear about it.
It goes straight to recovery — not to a show-cause notice. This is where DRC-01B genuinely diverges from its ITC sibling, and the two are often assumed to work the same way. They do not. Rule 88C(3) provides that where the amount stays unpaid and no explanation is furnished, or the explanation "is not found to be acceptable by the proper officer," it "shall be recoverable in accordance with the provisions of section 79" — direct recovery, with no Section 73, 74 or 74A adjudication first, because the liability was already self-assessed in your own GSTR-1. Rule 88D(3), the ITC-side sibling, is structured differently: an unresolved excess there is liable to be demanded under Section 73/74/74A — a full adjudication process, not a direct recovery. Do not carry the DRC-01C playbook over to a DRC-01B on the assumption the consequences match; they don't.

A DRC-01B answered on time is administrative. A DRC-01B ignored is a filing block sitting on top of a self-assessed liability that the department can recover without adjudicating it first — which is close to the worst posture available.

How to stop getting them

Rule 88C only ever compares two numbers, and you control both before you file. Three habits close it permanently:

Tie GSTR-1 to your books before you file it, not after. The outward tax in your sales register and the tax in GSTR-1 should agree to the rupee, with a named reconciling item for every difference — reverse charge, advances, credit notes.
Then tie GSTR-1 to Table 3.1 before you file 3B. Same period, same tax heads. This is a ten-minute check that prevents the entire notice.
Use GSTR-1A in the window it exists for. The interval between filing GSTR-1 and filing GSTR-3B is now the correction window for outward liability. Catching a duplicate there costs nothing; catching it after a DRC-01B costs seven days, a reply, and an amendment in a later return because that window has already shut.

None of this is intellectually hard. It fails because the reconciling items — reverse-charge supplies, advances, credit notes straddling a period end, amendments — accumulate across hundreds of documents a month, and reconstructing them under a seven-day clock is slow work done badly. And because the operative portal threshold is unpublished and configurable, "we were under the limit last time" is not a control — the only reliable one is a gap that is already reconciled to zero, or to named items, before you file.

Where Recoup fits

Recoup reconciles bank, books and the GST portal continuously and names the specific vendor or document behind a gap rather than stopping at a bucket total. For DRC-01B the value is upstream: a books-to-portal tie-out that already exists on the day the intimation arrives means step 2 — find the gap at document level — is a lookup rather than a week of work. The best response to a seven-day notice remains never receiving one.

Reconcile before you file, not after the notice

Recoup keeps your books and your GST filings tied out continuously, and names the exact document behind every difference.

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