What is a GST DRC-01 notice and how do I reply?

⚡ Short answerA DRC-01 is a show-cause-cum-demand notice issued under Section 73 (no fraud) or Section 74 (fraud) of the CGST Act when the department believes you underpaid GST or wrongly claimed ITC. You must reply in Form DRC-06 within the time stated (usually 30 days), with supporting reconciliation, or pay the demand to close it.

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Why you got it

Common triggers are a mismatch between GSTR-1 and GSTR-3B, ITC claimed in excess of GSTR-2B, or non-payment of tax. The notice quotes the section, the amount and the period.

How to respond

Read the section cited, reconcile your returns and purchase register, and file Form DRC-06 with your explanation before the deadline. If the demand is correct, pay via DRC-03 to avoid higher penalty. Ignoring it leads to an ex-parte order under Section 73/74.

Related questions

What happens if I ignore a DRC-01 notice?

The officer can pass an ex-parte demand order (DRC-07) confirming the full tax, interest and penalty. Always reply in DRC-06 within the deadline, even if only to seek time or clarify.

Related reading

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General information for AY 2026-27, not professional advice. Rules change with each Finance Act / notification and depend on your facts — verify with a licensed CA or advocate before acting.