A difference needs a timely, supported response
CGST Rule 88C addresses the stated excess of outward-supply tax liability over GSTR-3B liability. Part A of DRC-01B intimates the difference and directs payment with section 50 interest through DRC-03 or explanation on the portal within seven days. Checked on 28 October 2026, this guide concerns that output-liability process, not the DRC-01C ITC-difference route. No fixed monetary or percentage system-trigger threshold is invented here; use the actual intimation and applicable rule. ICAI April 2026 GST bare law: Rules 88C and 59(6)(d).
Reconcile the correct source versions
Rule 88C(1) expressly includes GSTR-1 as amended by GSTR-1A, if any, or IFF, compared with the period's GSTR-3B. Preserve the actual filed statements, amendments, tax-head totals and period. A draft sales register or an unfiled correction does not by itself change the statement used for the comparison. Break the displayed difference into identifiable transactions before concluding that the whole amount is unpaid tax. ICAI April 2026 GST bare law: Rules 88C and 59(6)(d).
Separate genuine short-payment from supported differences
Test duplicates, period allocation, valid amendments and payments against source records and the applicable substantive law. A reason code or explanation is not proof of correctness. Where a timing explanation is proposed, show the relevant invoice, period, return and actual tax discharge and confirm that the law permits the treatment. The numerical models stipulate the supported reconciliation items; they do not make every duplicate allegation or later payment an automatically accepted defence. ICAI April 2026 GST bare law: Rules 88C and 59(6)(d).
Part payment still needs a residual explanation
Under sub-rule (2), payment can be full or partial through DRC-03 with section 50 interest and its details furnished in DRC-01B Part B; reasons for any unpaid part are also furnished there. Keep tax principal and interest separate. A bank deposit, a draft DRC-03 or an internal email is not proof that the required portal response was filed. Reconcile payment references to the GSTIN, tax period and intimation so an unrelated payment is not used twice. ICAI April 2026 GST bare law: Rules 88C and 59(6)(d).
Track consequences accurately
Rule 59(6)(d) restricts subsequent GSTR-1/IFF filing until the stated deposit or reply requirements are met. Furnishing a reply does not itself prove that the officer accepts the explanation. Under Rule 88C(3), the specified unpaid amount becomes recoverable under section 79 where no explanation is furnished or it is not found acceptable, subject to the rule's conditions. Do not describe the intimation as automatically erasing valid objections, or a submitted reply as permanently cancelling liability. ICAI April 2026 GST bare law: Rules 88C and 59(6)(d).
Keep the response package reproducible
Retain Part A, receipt evidence, response diary, comparison exports, transaction-level reasons, DRC-03 and Part B acknowledgment. Where the portal's figures differ from filed evidence, preserve both and seek the supported correction route rather than silently editing a local report. The models isolate tax principal; rates, interest dates and any later recovery require separate verification. Calendar examples assume an established receipt date and elapsed days without a modifying order or counting rule. ICAI April 2026 GST bare law: Rules 88C and 59(6)(d).
Applicable primary references
ICAI April 2026 GST bare law: Rules 88C and 59(6)(d)
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Compute the displayed gap
Assume relevant outward-statement tax ₹12,00,000 and GSTR-3B tax ₹10,00,000. Difference is ₹2,00,000. It is the starting reconciliation amount, not proof that every rupee is ultimately payable.
Illustrative example 2: Part payment and residual
From an assumed ₹2,00,000 gap, the taxpayer admits and pays tax ₹1,20,000 through the proper route and supports an explanation for ₹80,000. Part B must reconcile both amounts; reporting only the paid ₹1,20,000 leaves the ₹80,000 response incomplete.
Illustrative example 3: Separate supported reconciling items
Assume gap ₹1,50,000 comprises an independently substantiated duplicate-reporting difference ₹40,000, an independently supported period explanation ₹30,000 and admitted unpaid tax ₹80,000. The three items sum to ₹1,50,000. Acceptance and legal validity of the explanations remain factual/legal questions.
Illustrative example 4: Keep tax heads visible
Assume differences IGST ₹60,000, CGST ₹20,000 and SGST ₹20,000. Total is ₹1,00,000. A ₹1,00,000 total payment reference without the correct head and period mapping does not by itself establish discharge of every stated component.
Illustrative example 5: Diary seven elapsed days
Assume receipt on 5 October 2026. Seven elapsed calendar days lead to 12 October 2026 in this isolated model; 13 October is day eight. Establish actual receipt and any applicable date rule before using the date for a real case.
Illustrative example 6: Do not reuse a payment
Assume gap ₹90,000, with a validly linked tax payment ₹30,000 and a separate ₹20,000 payment belonging to another unrelated period. Remaining principal for this intimation is ₹60,000, not ₹40,000 merely because both payment references appear in the account.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the correct process | DRC-01B output liability, not DRC-01C ITC |
| 2 | Record the actual intimation | GSTIN, period, Part A and receipt evidence |
| 3 | Diary seven days | Verified trigger and applicable counting rules |
| 4 | Preserve filed source versions | GSTR-1/IFF/GSTR-1A and GSTR-3B |
| 5 | Bridge each tax head | Statement amounts and difference calculation |
| 6 | Substantiate explanations | Invoice, amendment, period and legal treatment |
| 7 | Pay any admitted amount correctly | DRC-03, interest and appropriate mapping |
| 8 | Reconcile partial payment and residual | Full Part A amount accounted for once |
| 9 | File and retain Part B | Payment details, reasons and acknowledgment |
| 10 | Monitor follow-up and restrictions | Rule 59(6)(d), officer response and supported recovery/correction route |
Sixteen practitioner FAQs
1. Is DRC-01B an ITC mismatch form?
This guide concerns output-liability differences under Rule 88C.
2. Does the rule account for GSTR-1A amendments?
Yes, where applicable in its stated wording.
3. Can a draft local amendment replace filed evidence?
No. Establish actual filing and legal effect.
4. Does this article prescribe a fixed automatic trigger threshold?
No. It does not invent one.
5. How long is the stated response period?
Seven days under the rule.
6. Is every displayed difference conclusively unpaid tax?
Reconcile the facts and substantive law.
7. Can payment be partial?
Sub-rule (2) provides for full or partial payment.
8. Which payment form does it specify?
DRC-03, with the stated interest.
9. Where are payment details and reasons recorded?
Part B of DRC-01B as applicable.
10. Can an unpaid residual be ignored after part payment?
No. Account for and support it.
11. Is an internal email a substitute for Part B filing?
No.
12. Can unrelated payment references be reused?
No. Match GSTIN, period and underlying liability.
13. Do the examples calculate interest?
No. Interest needs its own verified working.
14. Can a reply affect the subsequent-filing restriction?
Rule 59(6)(d) states the relevant deposit/reply conditions.
15. Does submitting a reply prove acceptance?
No. Retain the actual follow-up conclusion.
16. What if the specified unpaid amount has no acceptable explanation?
Rule 88C(3) provides the stated section 79 recovery consequence.
Conclusion
Reconcile the actual outward-supply and GSTR-3B tax figures, link any DRC-03 payment, and explain the remaining difference in Part B within the stated response period.