How many days to reply DRC-01?

You must reply to DRC-01 within 30 days of receiving the notice using Form DRC-06 on the GST portal. You can request an extension if needed.

What is the penalty for DRC-01 under Section 73?

Under Section 73 (non-fraud), if you pay the full tax and interest before reply, the penalty is NIL. If paid after SCN but before order, penalty is 10% of tax or ₹10,000, whichever is higher.

DRC-06 is the reply form used to respond to a DRC-01 demand notice on the GST portal. You submit your written reply, supporting documents, and any admission of liability through DRC-06.

How to Reply DRC-01 Notice | GST Demand Notice Reply Format 2026

What is DRC-01 Notice?

DRC-01 is a Show Cause cum Demand Notice (SCDN) issued by a GST officer under Section 73 or Section 74 of the CGST Act, 2017. It formally demands payment of tax that the officer believes was not paid, short-paid, erroneously refunded, or where Input Tax Credit (ITC) was wrongly availed or utilised.

Unlike DRC-01B or DRC-01C which are system-generated, DRC-01 is issued manually by a GST officer — making it a more serious notice that requires a carefully drafted legal reply.

📋 Key Facts About DRC-01

Parameter	Details
Legal Basis	Section 73 (non-fraud) or Section 74 (fraud/suppression)
Issued By	GST officer (not system-generated)
Nature	Show Cause cum Demand Notice
Reply Deadline	30 days from notice date
Reply Form	DRC-06 on GST portal
Penalty (Sec 73)	NIL if paid before reply; 10% if paid after SCN
Penalty (Sec 74)	15% if paid before reply; 25% if paid after SCN

Section 73 vs Section 74 — What's the Difference?

The section under which DRC-01 is issued makes a massive difference to your penalty exposure:

✅ Section 73 — Non-Fraud

Honest mistakes, negligence, oversight
No allegation of suppression or fraud
Pay before SCN reply → ZERO penalty
Pay before order → 10% penalty
3-year time limit for department

⚠️ Section 74 — Fraud / Suppression

Fraud, wilful misstatement, suppression of facts
Serious allegation — needs strong rebuttal
Pay before SCN reply → 15% penalty
Pay before order → 25% penalty
5-year time limit for department

💡

Pro Tip: If you received a DRC-01 under Section 74 but believe the discrepancy was an honest mistake (not fraud), challenge the section classification in your reply. Getting a notice reclassified from Section 74 to Section 73 can reduce your penalty from 25% to NIL.

How to Reply DRC-01 — Step by Step

Read the DRC-01 carefully — identify every demand point

Check the notice for: tax period, section invoked (73 or 74), exact nature of demand (short payment, wrongful ITC, non-payment), and the tax, interest, and penalty amounts demanded.

Verify figures against your returns and records

Compare the demand amount against your GSTR-1, GSTR-3B, GSTR-2A/2B, purchase register, and payment challans. Identify whether the demand is entirely wrong, partially wrong, or correct.

Consider paying undisputed tax before replying (Section 73)

If any part of the demand is valid and the notice is under Section 73, paying that tax and interest before filing your reply reduces your penalty to ZERO on the paid amount. This is the smartest financial move.

Draft your DRC-06 reply

Write a point-by-point reply addressing every allegation in the DRC-01. Cite the relevant sections of CGST Act 2017, attach supporting documents, and clearly state why the demand (or part of it) is not maintainable. Use formal legal language.

File via DRC-06 on GST portal within 30 days

Log in to gstin.gov.in → Services → User Services → My Applications → Reply to Show Cause Notice. Upload your reply and supporting documents via Form DRC-06.

Attend personal hearing if summoned

After reviewing your reply, the officer may issue a personal hearing notice. Attend with a CA or GST advocate. Present your case and documents in person.

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DRC-01 Reply Format — What to Include

Your DRC-01 reply (filed as DRC-06) must include:

Reference to DRC-01 notice number and date
Your GSTIN, trade name, and registered address
The tax period and demand amount under dispute
Point-by-point response to every allegation in the notice
Legal citations: "In response to the Show Cause Notice under Section 73(1)/74(1) of the Central Goods and Services Tax Act, 2017…"
Supporting documents: invoices, payment challans, GSTR-2A reconciliation, e-way bills
If paying any amount: DRC-03 payment reference number
Request for dropping proceedings / reducing demand

⚖️ Key Legal Provisions for DRC-01 Reply

Section 73, CGST Act 2017 — Determination of tax not paid (non-fraud cases)
Section 74, CGST Act 2017 — Determination of tax with fraud / suppression
Section 74A, CGST Act 2017 — Applicable from FY 2024-25: unified provision replacing Sections 73 & 74 for certain periods
Rule 142, CGST Rules 2017 — Procedure for demand and recovery
DRC-03 — Voluntary tax payment form (if paying before reply)
DRC-06 — Reply form for responding to DRC-01

What Happens After You Reply?

Scenario	Officer's Action	Your Outcome
Reply accepted, no demand payable	Issues DRC-05 (conclusion of proceedings)	Case closed, no payment required
Partial acceptance	Adjudication order for remaining amount	Pay reduced demand + interest
Reply rejected	Issues Order-in-Original (OIO)	Can appeal to Appellate Authority within 3 months
No reply filed	Ex-parte adjudication order	Full demand + penalty + interest confirmed

Frequently Asked Questions — DRC-01

What is DRC-01 notice in GST?

DRC-01 is a Show Cause cum Demand Notice issued by a GST officer under Section 73 (non-fraud) or Section 74 (fraud) of CGST Act 2017. It formally demands payment of tax that was allegedly not paid or short-paid, and gives you 30 days to respond.

What is the deadline to reply DRC-01?

You must reply to DRC-01 within 30 days using Form DRC-06 on the GST portal. Failing to reply results in an ex-parte adjudication order where the officer can confirm the full demand plus maximum penalty.

Can I get zero penalty on DRC-01?

Yes, if the notice is under Section 73. If you pay the full tax demand and applicable interest before filing your reply (DRC-06), the penalty is NIL. This is the most cost-effective approach if the tax demand is valid.

What is DRC-06 form?

DRC-06 is the official reply form used to respond to a DRC-01 demand notice on the GST portal. It is filed under Rule 142(3) of CGST Rules 2017. You can attach supporting documents and indicate whether you accept, partially accept, or dispute the demand.

DRC-01 notice kaise reply kare? (Hindi)

DRC-01 ek serious GST demand notice hai. GST portal par login karein, DRC-06 form fill karein, apni position explain karein (kyun demand galat hai ya kitni demand sahi hai), documents attach karein, aur 30 din mein submit karein. Agar demand sahi lag rahi ho toh reply se pehle tax chukayein — Section 73 mein penalty ZERO ho jaayegi.

Can I appeal if the DRC-01 adjudication order goes against me?

Yes. If the Order-in-Original (OIO) goes against you, you can appeal to the Appellate Authority (Commissioner Appeals) within 3 months of receiving the order. You must pre-deposit 10% of the disputed tax amount before filing the appeal.

How to Reply DRC-01 GST Demand Notice — Complete Guide 2026