A composite case drawn from several real engagements; figures rounded and details changed.
A Jaipur electrical-goods trader received a DRC-01 show cause notice: reverse ₹11.8 lakh of input tax credit claimed across two financial years, plus interest and penalty. The stated ground was the familiar one — credit claimed in GSTR-3B exceeded what appeared in GSTR-2A/2B. Here is how the reply was built, and why most of the demand did not survive.
Where these demands come from
A 2A/2B mismatch almost always traces back to the supplier, not the buyer. A supplier files GSTR-1 late or not at all, reports the invoice under the wrong GSTIN, or files GSTR-1 but never pays the tax through GSTR-3B. The invoice then never lands in your 2B, and the department's system flags the gap. In the hard-lock era — where auto-populated 3B liability is locked and returns older than three years cannot be filed at all — a defaulting supplier can no longer quietly fix things later. Mismatches crystallise faster, and so do the notices.
In our trader's case, the ₹11.8 lakh broke into three buckets: about ₹7.2 lakh from two suppliers who had filed GSTR-1 late (the credit appeared in 2B, just in later months), about ₹3.9 lakh from one supplier who had stopped filing entirely, and roughly ₹0.7 lakh of genuine clerical errors on the trader's side.
The 30-day clock
A DRC-01 typically gives 30 days to reply. That sounds like enough time; it is not, if you start from zero. The first week goes to pulling data — invoice-wise reconciliation of 3B claims against 2B for each disputed period. The second goes to chasing suppliers for confirmations. Only then can drafting start. If you genuinely cannot make the date, seek an adjournment in writing before the deadline — an ignored DRC-01 usually becomes an ex parte order for the full amount, and unwinding that is far harder than replying was. Our DRC-01 reply guide walks the procedure step by step.
The evidence pack
The reply is only as strong as its annexures. For every disputed invoice we assembled:
| Document | What it proves |
|---|---|
| Tax invoice | A valid document existed; GSTIN, rate and tax amount correct |
| Bank payment proof | Supplier was paid including tax — you were not part of any evasion |
| E-way bill / transport docs | Goods actually moved and were received |
| Supplier follow-up trail | Emails and letters asking the supplier to file — bona fide conduct |
| Reconciliation sheet | Invoice-wise mapping of the demand to 2B, month by month |
The arguments in the DRC-06
The reply is filed as a DRC-06 on the portal. Ours ran on three lines. For the ₹7.2 lakh late-filer bucket: the credit was not missing, only time-shifted — the reconciliation showed every invoice appearing in 2B in later months, so there was no excess claim at all, merely a timing difference the summary-level comparison could not see. For the ₹3.9 lakh non-filer bucket: section 16(2)(c) conditions were addressed head-on with the full evidence pack — genuine invoice, payment through banking channels, receipt of goods, and a documented follow-up trail — along with the settled position from several High Courts that a bona fide buyer should not be penalised mechanically for a supplier's default without the department first proceeding against that supplier. The Rule 36(4) history for the relevant periods was also set out, showing claims stayed within the limits in force at the time. The ₹0.7 lakh of genuine errors we conceded upfront and paid with interest — conceding the indefensible early buys credibility for everything else.
The hearing and the outcome
The personal hearing lasted under twenty minutes, because the officer had a paginated, invoice-wise paper book in front of him rather than a rhetorical essay. The timing bucket was dropped in full. The non-filer bucket was reduced substantially after the evidence was verified, with a small sustained portion where transport proof was incomplete. Of ₹11.8 lakh demanded, the final order sustained roughly ₹1.4 lakh — most of it the conceded errors. This pattern repeats across our notice work: where the documentation holds, demands get dropped or sharply reduced; where records are thin, even good legal arguments struggle.
What to keep monthly so this never lands
- Reconcile purchases against GSTR-2B every month before filing 3B, not at year-end.
- Act on IMS: accept, reject or hold invoices on the portal so your 2B stays clean.
- Flag suppliers whose invoices repeatedly miss 2B — chase them in writing, or switch.
- File payment proof, e-way bills and transport documents invoice-wise, not in a heap.
- Keep a simple vendor-compliance tracker; it is the cheapest insurance in GST.
How we can help
We reply to GST notices for businesses across Rajasthan and beyond — on retainer, a notice reply starts within 48 hours. If a DRC-01 (or the ASMT-10 that often precedes it) has landed, send it to us before drafting anything yourself. And if you would rather never see one, our bookkeeping and MIS retainers build the monthly 2B reconciliation discipline described above into your books.
Read our step-by-step DRC-01 show cause notice reply guide →
This article is general information, not tax advice. Rules and rates can change; confirm specifics for your business before acting.