GSTR-1 vs GSTR-3B Mismatch: Why the Portal Sends a DRC-01B Notice

The Short Answer

DRC-01B is an automated intimation the GST portal sends when the tax liability you declared in GSTR-1 for a period is significantly higher than the tax you actually paid in GSTR-3B for that same period. It is not a human officer flagging your return - it is a system-generated comparison that runs the moment both returns are filed, under Rule 88C of the CGST Rules.

The part that catches people out is not the notice itself. It is the seven-day reply window attached to it, and what happens on the portal if that window closes with no response.

Why the Portal Even Compares These Two Returns

GSTR-1 and GSTR-3B report the same outward supplies, but they are filed separately and, for most businesses, prepared somewhat separately too. GSTR-1 is built from invoice-level sales data. GSTR-3B is a summary return where the outward tax liability figure is meant to match what GSTR-1 already declared for the period.

They diverge when the two are not actually built from the same source - a sales register updated after GSTR-1 was filed, a manual GSTR-3B figure that never picked up a late invoice, or invoices added to GSTR-1 through an amendment that GSTR-3B never reflected. None of this requires anyone to make an error on either return individually. It just requires the two to have been assembled from data that moved between the two filings.

The Threshold That Triggers It

Rule 88C’s intimation is not sent for every rupee of difference. It applies where the tax payable per GSTR-1 exceeds the tax paid per GSTR-3B by more than 20%, and by more than ₹25 lakh - both conditions have to be met. A small business with a modest absolute gap, or a large business with a proportionally small percentage gap, will generally not trigger it even though a real difference exists.

This threshold has been revised before and is set by notification rather than fixed in the primary Act, so confirm the figures currently in force rather than treating these as permanent.

The Seven-Day Window Is the Real Deadline

Once DRC-01B is issued, you get Part A - the intimation itself, showing the computed difference - and you are expected to respond through Part B within the window specified, generally seven days. There are exactly two ways to respond:

Pay the differential through Form DRC-03, if the gap reflects tax genuinely owed, or
Explain the difference in Part B - the invoice was reported in the wrong period, the amount was already paid through a different mechanism, or a specific documented reason for the gap.

Silence is the option that costs you. Under Rule 59(6), if the seven-day window closes without a payment or an explanation, the portal blocks filing of the next period’s GSTR-1 (or IFF) for that GSTIN. The mismatch stops being a paperwork gap and starts being an operational one - you cannot report your next month’s sales until this one is resolved.

What Actually Causes the Gap

Invoices reported in GSTR-1, tax not yet reflected in GSTR-3B. A late invoice added to GSTR-1 through an amendment after the original filing, where the corresponding GSTR-3B was already filed based on the earlier figure.

Advances or adjustments handled inconsistently. An advance receipt taxed in one return’s period and adjusted against an invoice in a different period on the other return.

A manually prepared GSTR-3B. Where GSTR-3B’s outward tax figure is typed in from a separate working rather than derived from the same invoices already reported in GSTR-1, any divergence between the two sources becomes a real difference.

Credit notes timed differently. A credit note reducing GSTR-1’s liability for a period that GSTR-3B’s figure does not yet reflect, or the reverse.

What DRC-01B Is Not

It is not a demand. No tax is deemed payable purely because the intimation was issued - it is a prompt to reconcile and respond, not an assessment. And it is not the same mechanism as the ITC-side comparisons between GSTR-2B and GSTR-3B that we covered in The Credit You Thought You Had - that compares credit claimed against credit available; DRC-01B compares liability declared against liability paid. They run independently and can both apply to the same filing period for entirely different reasons.

FAQ

Do I have to pay the amount shown in DRC-01B? Only if the gap reflects tax you actually owe. If it is a timing difference or a reporting artifact, you explain it in Part B instead of paying.

What happens if I miss the seven-day window? The portal blocks GSTR-1 (or IFF) filing for your next period under Rule 59(6), until you respond through DRC-01B Part B.

Is DRC-01B the same as a GST notice from a tax officer? No. It is fully automated, generated the moment the threshold comparison runs after both returns are filed. Human scrutiny happens separately and later, if at all.

Can a difference within the threshold still be worth checking? Yes. The threshold decides when the portal auto-flags it, not whether a real difference exists. A gap under ₹25 lakh or under 20% can still be worth reconciling before it accumulates.

Does correcting GSTR-1 in a later period fix the original mismatch? Only if the correction is properly reflected in the GSTR-3B of the period it belongs to. Fixing GSTR-1 without the corresponding GSTR-3B adjustment can simply move the mismatch to a different period.

Where Invozen Fits

The direct way to avoid a DRC-01B intimation is to remove the reason the two returns would ever disagree, which is a structural choice rather than a detection feature. In Invozen, GSTR-3B’s outward supply figures for a period are pulled from the same invoices already tagged to that GSTR-1 filing period - not entered separately, and not derived from a different working. Where an invoice moves between periods through a GSTR-1 amendment, the same tagging carries into the corresponding GSTR-3B calculation, so the two returns stay built from one dataset instead of two.

To be direct about the limits: Invozen does not monitor the GST portal for a DRC-01B notice or manage the Part B response - that is a filing action your CA takes on the portal itself. What it removes is the most common cause of getting one in the first place: GSTR-1 and GSTR-3B drifting apart because they were assembled from different data at different times.

Book a 30-minute demo to see how a GSTR-3B period is built from the same invoices already filed in GSTR-1.

This reflects the position as of September 2026 and is general information, not tax advice. The Rule 88C threshold, the Part B reply window, and the Rule 59(6) filing restriction have been amended before and may change again - confirm the figures currently in force with your tax advisor.