Received a DRC-01 GST Show Cause Notice?
What is a DRC-01 in GST?
A DRC-01 is a formal show cause notice issued by GST authorities under Sections 73 or 74 of the CGST Act, 2017, when discrepancies are found in tax payments, input tax credit (ITC) claims, or GST returns. The DRC-01 initiates the demand and recovery process, requiring the taxpayer to explain why tax, interest, or penalty should not be levied. A GST Show Cause Notice Lawyer assists in analyzing the DRC-01, preparing a robust reply, and representing the taxpayer before the authorities
Legal Framework: DRC-01, DRC-01A, DRC-06 and Related Forms
- DRC-01A: Pre-SCN intimation, giving the taxpayer an opportunity to pay or respond before a formal DRC-01 is issued.
- DRC-01: The official show cause notice summarizing the alleged discrepancies and proposed demand.
- DRC-06: The form used to submit a detailed reply to the DRC-01, including supporting documents and legal arguments.
- DRC-03: Used for voluntary payment of tax, interest, or penalty, either before or after receiving a DRC-01/DRC-01A.
- DRC-07: The summary of the final order after adjudication
Common Reasons for Receiving a DRC-01 Notice
- Non-payment or short payment of GST
- Excess or ineligible ITC claims (often due to GSTR-2A/2B vs GSTR-3B mismatches)
- Wrongful or excess GST refunds
- Discrepancies in GST returns or missing invoices
- Supplier GST registration cancellation affecting ITC
- Suspected fraud, suppression, or willful misstatement (Section 74 cases)
Your GST Show Cause Notice Lawyer can identify the specific grounds and advise on the best legal strategy for your DRC-01 reply.
Legal Implications & Consequences
Ignoring or mishandling a DRC-01 notice can result in:
- Ex-parte adjudication and confirmation of demand
- Penalties and interest
- Recovery proceedings (bank attachment, property seizure)
- Suspension or cancellation of GST registration
- Blocking of GSTR-1 filing access
- Adverse compliance rating and increased audit riskYour GST Show Cause Notice Lawyer ensures your DRC-01 reply is timely, comprehensive, and legally sound.
Step-by-Step: How to Respond to a DRC-01 Notice
Step 1: Review the DRC-01 notice and allegations with a GST Show Cause Notice Lawyer
Step 2: Gather supporting documents (GST returns, invoices, e-way bills, contracts, bank statements)
Step 3: Draft a detailed, point-wise, and legally reasoned DRC-01 reply using DRC-06
Step 4: Attach all relevant evidence and reconciliations (returns vs books vs portal data)
Step 5: Submit the DRC-01 reply via the GST portal within the deadline (usually 7–30 days)
Step 6: Request a personal hearing if required and prepare a written synopsis
Step 7: Track the status of the adjudication order (DRC-07) and prepare for appeal if needed
Technical Requirements for DRC-01 Reply
- Timelines: Respond within 30 days of receipt (or as specified in the notice). Delays can result in penalties and blocked GSTR-1 access.
- Documentation: Attach up to four key documents (returns, invoices, reconciliations, contracts, bank statements). Choose the most relevant evidence.
- Submission: File the reply using DRC-06 on the GST portal. Use DSC or EVC for verification. Ensure all submissions are acknowledged and digitally signed
- Best Practices:
- Maintain accurate and organized records
- Conduct regular reconciliations
- Seek professional legal advice for complex or high-stakes matters
- Retain all correspondence and evidence for audit and appeals
Why a GST Show Cause Notice i.e DRC-01 Reply requies Professional attention?
- Expert Analysis: Interprets complex allegations and legal provisions
- Robust Drafting: Prepares comprehensive, point-wise replies with supporting evidence
- Representation: Appears in hearings and manages all procedural requirements
- Penalty Minimization: Strategizes to reduce or eliminate penalties and interest
- Appeal Support: Prepares for and files appeals if the order is adverse
Your GST Show Cause Notice Lawyer ensures your DRC-01 reply is compliant, persuasive, and defensible in future proceedings.
Frequently Asked Questions (FAQ)
1. What is the deadline to respond to a DRC-01 notice?
The reply period is typically 7–30 days from the date of service, as specified in the notice. Extensions may be granted at the authority’s discretion
2. What happens if I ignore the DRC-01 notice?
Non-response can lead to ex-parte orders, confirmation of demand, recovery actions, and possible cancellation of GST registration
3. Can I appeal against an adverse order after a DRC-01 reply?
Yes, an appeal can be filed under Section 107 of the CGST Act within the prescribed limitation period, subject to pre-deposit requirements.
4. What documents are needed for a DRC-01 reply?
GST returns, invoices, e-way bills, contracts, bank statements, reconciliations, and any correspondence relevant to the allegations.
5. How do I file a DRC-01 reply on the GST portal?
Log in, navigate to “My Applications,” select the DRC-01 notice, draft your reply in DRC-06, attach documents, and submit using DSC/EVC.
6. Is DRC-01A mandatory before every DRC-01?
Generally, yes. DRC-01A is a pre-notice intimation, but in some cases, authorities may proceed directly to DRC-01
7. What is the difference between DRC-01 and DRC-06?
DRC-01 is the show cause notice; DRC-06 is the form used to submit your reply.
8. Can a GST Show Cause Notice Lawyer help with voluntary payment?
Yes, a GST Show Cause Notice Lawyer can advise on voluntary payment options (DRC-03) and their impact on penalty and proceedings.
9. What are the risks of self-drafting a DRC-01 reply?
Errors in legal reasoning, missed deadlines, or incomplete documentation can result in adverse orders and higher penalties.
10. How do I contact a GST Show Cause Notice Lawyer at AMLEGALS?
The firm’s team of GST lawyers and consultants operate in major cities including Ahmedabad, Mumbai, New Delhi, Bengaluru, Kolkata, Chennai, Pune, Surat, and Prayagraj.
- Email: info@amlegals.com
- Boardline: +91-8448548549
- Offices: Ahmedabad | Bengaluru | Chennai | Hyderabad | Mumbai | New Delhi | Kolkata | Prayagraj | Pune | Surat | Vapi
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