DRC-01C is an automated intimation under Rule 88D: the ITC you claimed in GSTR-3B for a month is higher than the ITC available in your GSTR-2B by more than the threshold set by the system. Until you respond, your next GSTR-1 / IFF is blocked (Rule 59(6)).
You have 7 days
Within 7 days, do one of two things:
- Part B - explain the difference, or
- Pay / reverse the excess ITC with interest through DRC-03 and quote the ARN in Part B.
Valid explanations
- Supplier filed late: the invoice appears in a later month's GSTR-2B. Give the invoice number and the later period.
- Import of goods (IGST on bill of entry): appears in 2B through ICEGATE with a delay or not at all for some ports.
- ITC of earlier periods claimed this month within the Section 16(4) time limit.
- Reverse charge ITC - shows in 3B but not as supplier invoices in 2B.
- ISD distributions or TDS/TCS credits confused with ITC (they're different ledgers).
- Clerical error - wrong table in 3B; already corrected next month.
Explain each with invoice numbers, supplier GSTINs, amounts and the period where it appears.
How to file
Services → Returns → Intimation of ITC mismatch (or the notice under View Additional Notices), choose DRC-01C, fill Part B: select the option, give reasons, attach a reconciliation and invoice list, and file with DSC/EVC.
Prevent the next one
- Reconcile GSTR-2B with your purchase register every month before filing 3B, and claim only what's in 2B (plus documented exceptions).
- Follow up with suppliers who file late.
- Keep a running list of "ITC deferred to next month".
Draft a DRC-01C Part B reply in a minute - paste the notice and your reasons.