E-way notices

The demand notice issued in Form DRC-01A arises from a clerical misclassification where amounts were entered under "Cess" instead of regular tax heads, even though GSTR-1 and GSTR-3B were filed correctly. The reply should provide a reconciliation proving proper tax payment in GSTR-3B and request the officer to drop the demand.

Clerical error in books but correct filing in GSTR-3B and GSTR-1 is solid ground to contest this DRC-01A.

The key argument: Section 73 demands can only be confirmed if there is NON-PAYMENT or SHORT-PAYMENT of tax. If your GSTR-3B correctly shows IGST, CGST and SGST amounts and the tax was paid in full, the demand has no basis.

Here is what to do for the reply:

- Pull out the GSTR-3B returns for all months in FY 2022-23 and extract the IGST, CGST, SGST amounts reported.
- Prepare a month-wise reconciliation showing books amount vs GSTR-3B amount vs actual payment.
- In the DRC-01A reply screen on the GST portal, state that the cess entry in internal records was a clerical misclassification. Attach the reconciliation and GSTR-3B summary as supporting documents.
- Request the officer to drop the demand on the ground that tax liability was correctly disclosed and paid through GSTR-3B.

The officer must consider your reply before issuing a final demand under DRC-07. A well-supported reconciliation response typically resolves clerical error notices at the first stage itself.

This [GST notice reply guide](https://taxgarden.in/blog/gst-notice-reply-format) covers the DRC-01A response procedure with formats for different notice scenarios.