Use the new forms only from their notified start
Notification 05/2026–Central Tax amends Rule 86A and inserts DRC-26, DRC-27 and DRC-28 with effect from 1 April 2027. This is a preparation guide to the notified framework, not an assertion that the forms are already in use in November 2026. For restrictions that predate commencement, check the applicable procedure and any transition guidance rather than assuming automatic migration.
Read the applicable text: Archived Gazette text: Notification 05/2026–Central Tax, Rule 86A and Forms DRC-26 to DRC-28 Government e-Gazette PDF CG-DL-E-27102026-277451 CBIC Notification 40/2021: DRC-22A.
Match the objection to the exact restricted amount
Under amended Rule 86A(1), the proper officer records the reasons in writing and issues Form GST DRC-26 to restrict debit of an amount equivalent to the credit in question. The order is made available on the common portal. Obtain the full reason and match it to the invoice-level population and the ledger by tax component. DRC-27 is the registered person’s objection to debit being, or having been, disallowed. Cross-reference the original order and include the objection and supporting documents, with a reason-by-reason schedule of credit evidence, clearly distinguishing missing evidence from amounts admitted or disputed.
Track restoration and expiry independently
Under amended Rule 86A(4), after receiving an objection the proper officer must give the registered person a reasonable opportunity to be heard before issuing Form GST DRC-28 on the common portal. Part A allows debit as stated, including its operative date; Part B rejects the objection and the restriction continues subject to the rule. Under amended Rule 86A(2) the restriction ends on expiry of one year from issuance or earlier when the proper officer allows debit by order on being satisfied the conditions no longer exist. Record actual restoration and any independent restriction. A rejection does not start a new one-year period.
Keep the dispute and cash forecast separate
The order concerns debit from the electronic credit ledger. A cash funding estimate based on its effect is not the same as reversal of credit or determination of a demand. Reconcile tax-head eligibility and lawful utilisation before making payments. Do not confuse DRC-27 with DRC-22A, the objection mechanism for provisional attachment of property under a different rule.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Find the blocked portion
A ledger shows ₹50 lakh total and a restriction of ₹18 lakh against that balance. ₹32 lakh remains outside this restriction, before applying tax-head and other usage limits.
Illustrative example 2: Restoration reconciliation
An order covers ₹12 lakh and the ledger shows only ₹9 lakh restored when checked. The ₹3 lakh difference needs investigation; check the effective date and any other orders.
Illustrative example 3: Evidence coverage
A restriction of ₹20 lakh is traced to documents supporting ₹15 lakh, with ₹2 lakh separately conceded in the illustrative review. ₹3 lakh remains to be substantiated; evidence classification does not itself restore debit.
Illustrative example 4: No new clock on rejection
DRC-26 is issued on 14 April 2027 and Part B arrives on 1 June 2027. The one-year anniversary to diarise is 14 April 2028, anchored to issuance. The dates span 366 days because 2028 is a leap year. Check the precise expiry and portal implementation.
Illustrative example 5: Earlier release
The original order issues 10 May 2027, with a one-year anniversary of 10 May 2028. A later order allows debit from 10 August 2027. That is 92 days after issuance and is earlier than the anniversary.
Illustrative example 6: Cash forecast
For one tax head, ₹14 lakh must be funded and only ₹9 lakh credit is actually usable after the restriction. Under the assumed utilisation rules and no other balances, budget ₹5 lakh cash.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm commencement | Order date, applicable rule and transition position. |
| 2 | Retrieve the restriction | DRC-26 and portal availability evidence. |
| 3 | Verify order references | GSTIN, jurisdiction, tax components and reasons. |
| 4 | Reconcile the exact amount | Electronic credit ledger and invoice population. |
| 5 | Build the objection evidence | Invoice eligibility, receipt and other relevant records. |
| 6 | File the prescribed objection | DRC-27, order ARN and acknowledgement. |
| 7 | Track hearing | Notice, submissions and proof of attendance. |
| 8 | Review the outcome | DRC-28 Part A or B and operative terms. |
| 9 | Track earlier release or anniversary | Original issuance, order date and ledger implementation. |
| 10 | Reconcile cash separately | Usable credit by head, further restrictions and funding. |
Sixteen practitioner FAQs
1. When do the notified forms take effect?
1 April 2027 under Notification 05/2026.
2. Are they treated as in use in November 2026?
No. This guide addresses a future notified procedure.
3. Which form starts the new order trail?
DRC-26 records the restriction.
4. Which form contains the objection?
DRC-27 under amended Rule 86A(3).
5. What identifies the original restriction?
Use the DRC-26 order reference and ARN.
6. Does the hearing requirement remain?
The amended rule requires a reasonable opportunity before the objection order.
7. What is Part A of DRC-28?
The order allowing debit as stated.
8. What is Part B?
The rejection order on the objection.
9. What begins the one-year period?
Issuance of the original DRC-26 order.
10. Can release happen before that?
Yes, by the officer’s order in the circumstances in Rule 86A(2).
11. Does Part B restart the period?
No. Keep the original issuance anchor.
12. Is the ledger balance all available to debit?
No. Reconcile restrictions and applicable utilisation rules.
13. Can a cash funding estimate be treated as a demand?
No. It measures liquidity under stated assumptions.
14. Is DRC-22A the same application?
No. It concerns provisional attachment under a different procedure.
15. What if the portal shows less restoration than the order?
Preserve both, check timing and other restrictions, and escalate the mismatch.
16. What about a pre-commencement order?
Check its applicable rules and any transition direction before using the new route.
Official sources
Archived Gazette text: Notification 05/2026–Central Tax, Rule 86A and Forms DRC-26 to DRC-28 Government e-Gazette entry CG-DL-E-27102026-277451