Received a show cause notice in Form GST DRC-01 or a pre-notice intimation in DRC-01A? This free tool, built by a practising Chartered Accountant, prepares a professionally structured draft reply – with issue-wise legal grounds, current case law, reconciliation annexure formats, the mandatory personal-hearing request under Section 75(4), prayer and verification – ready to edit, sign and attach to Form DRC-06 on the GST portal. Updated for Sections 73, 74 and the new Section 74A (FY 2024-25 onwards).
1Taxpayer details
2Notice details
Demand proposed in the notice (Rs)
| Head | Tax | Interest | Penalty |
|---|---|---|---|
| IGST | |||
| CGST | |||
| SGST | |||
| Cess |
3Preliminary objections (tick those that apply)
4Issues alleged in the notice (select all that apply)
5Payment already made (optional)
DRC-01A vs DRC-01: what you received and how the process runs
DRC-01A (Part A) is a pre-notice intimation under Rule 142(1A) – the officer communicates the tax, interest and penalty ascertained BEFORE issuing a show cause notice. You may pay (fully or partly) via DRC-03 and/or file submissions in Part B of DRC-01A by the date stated in the intimation. Since 15 October 2020 the intimation is discretionary for the officer. DRC-01 is the summary of the actual show cause notice issued under Section 73, 74 or 74A – your reply is filed online in Form DRC-06, and any payment is intimated in DRC-03. If a demand order (DRC-07) later issues, payments are adjusted through DRC-03A.
Section 73 vs 74 vs 74A at a glance
| Particulars | Section 73 (non-fraud) | Section 74 (fraud) | Section 74A (FY 2024-25 on) |
|---|---|---|---|
| Applies to | Periods up to FY 2023-24 | Periods up to FY 2023-24 | FY 2024-25 onwards (both limbs) |
| SCN time limit | 3 months before order due (order: 3 years from annual return due date) | 6 months before order due (order: 5 years) | 42 months from annual return due date |
| Order time limit | 3 years | 5 years | 12 months from SCN, extendable by 6 |
| No / reduced penalty window | Nil if tax + interest paid before SCN or within 30 days of SCN | 15% before SCN; 25% within 30 days of SCN; 50% within 30 days of order | Same patterns but with 60-day windows |
| Penalty otherwise | 10% of tax or Rs 10,000, whichever is higher | 100% of tax | Mirrors 73 or 74 pattern by limb |
Do’s and don’ts when replying to a DRC-01
- Do reply by the due date – an ex parte order on non-reply is the worst outcome; seek adjournment (maximum three) if you need time.
- Do always request a personal hearing – Section 75(4) makes it mandatory before any adverse order, and courts quash orders passed without one.
- Do attach reconciliations, invoices, e-way bills, bank proofs and ledgers as numbered annexures – a reply without documents is just assertion.
- Do check the maths – interest on wrongly availed ITC arises only on utilisation (Rule 88B), and at 18%, not the 24% often quoted.
- Don’t admit liability casually – a vague apology in a reply is used against you; pay admitted amounts via DRC-03 and dispute the rest under protest.
- Don’t ignore the section quoted – if Section 74 is invoked without any evidence of fraud or suppression, say so; it changes the penalty from 100% to 10%.
- Don’t copy internet templates blindly – grounds must match your facts, and outdated templates miss Section 16(5), Section 74A and Rule 88B.
Frequently asked questions
Is there a time limit to reply to DRC-01A Part A?
No statutory period is fixed – respond by the date stated in the intimation itself (commonly 7 to 15 days). Even if you miss it, submissions can still be made once the DRC-01 show cause notice issues.
What happens if I pay the full tax with interest after receiving the notice?
Under Section 73, payment of tax and interest within 30 days of the notice means no penalty is payable and the proceedings are deemed concluded. Under Section 74 the penalty reduces to 25% within 30 days of the SCN. For FY 2024-25 onwards, Section 74A gives you 60 days for both limbs.
Can the officer pass an order without giving me a hearing?
No. Section 75(4) mandates a personal hearing where any adverse decision is contemplated – courts have quashed orders passed without a hearing even where the taxpayer ticked “No” in the reply form. This tool always includes the hearing request.
The notice is for ITC claimed after the Section 16(4) deadline for FY 2017-18 to 2020-21. Is there relief?
Yes. The retrospectively inserted Section 16(5) validates ITC for FY 2017-18 to 2020-21 availed in returns filed up to 30 November 2021. The reply should invoke Section 16(5) read with Circular 237/31/2024.
Is the reply filed as a letter or online?
Online in Form DRC-06 – but the portal reply box is small, so the detailed reply generated here is attached as a signed PDF annexure, with a short summary pasted in the box. The tool generates both.
Can I still use the Section 128A amnesty (interest and penalty waiver)?
The window closed – tax was payable by 31 March 2025 and applications by 30 June 2025. It is relevant now only if you already filed SPL-01/02 and those applications are pending.