DRC-01 – Summary of Show Cause Notice (SCN)

DRC-01 is the online summary of a Show Cause Notice issued when the department believes GST has been short-paid, unpaid, or ITC has been wrongly claimed or refunded. It provides a brief version of the main SCN, showing the period, amount proposed, and legal basis for initiating proceedings. It officially starts the adjudication process under Section 73 or 74 and serves as formal online intimation.

DRC-01 does not replace the detailed SCN; it only records it on the GST portal. After receiving this form, the taxpayer may file a reply in DRC-06, request a personal hearing, or make voluntary payment through DRC-03 to reduce or conclude liability.

Key Situations Where DRC-01 Is Issued

• GST short payment or non-payment in returns.
• Wrong or ineligible ITC claimed or used.
• Excess or incorrect refund taken.
• Objections raised during audit, special audit, or anti-evasion enquiry.

These issues lead to a detailed SCN being issued by the officer, and its summary is mandatorily uploaded as DRC-01.

Legal Framework and Authority

DRC-01 operates under the statutory mechanism that requires every Show Cause Notice to be formally summarised and recorded on the GST portal. Its issue, authority, and purpose are strictly governed by specific sections and rules of the GST law.

• Issued under Rule 142(1)(a) which requires every SCN to be summarised and uploaded in the DRC format on the GST portal.
• Used for proceedings under Section 73 (non-fraud cases) and Section 74 (fraud or suppression cases) of the CGST Act.
• Uploaded by the Proper Officer, generally a Superintendent, Assistant Commissioner, or Deputy Commissioner.
• Functions as the legally recognised electronic communication confirming that an SCN has been issued to the taxpayer.

Contents of DRC-01

DRC-01 contains the essential information of the Show Cause Notice in a concise format, allowing the taxpayer to immediately understand the period, amount, and reason for the proposed demand.

• Includes basic details such as GSTIN, legal name, and address to identify the registered person correctly.
• Shows the SCN reference number, date, and relevant tax period covered under the proposed demand.
• Presents a clear breakup of tax, interest, penalty, and cess calculated by the department.
• Contains a brief reason for the demand, such as short payment, ineligible ITC, or excess refund claimed.
• Provides a direct link to file reply in DRC-06, enabling the taxpayer to respond to the notice online.

Practical Notes

• DRC-01 is only a summary; obtain the full SCN and annexures separately.
• Verify whether Section 73 or 74 is correctly applied, as penalties vary.
• Check computation errors, tax period mismatch, and ITC differences.
• Voluntary payment through DRC-03 helps reduce penalty exposure.

Next Steps After Receiving DRC-01

Once DRC-01 appears on the portal, review the figures, collect the detailed SCN, and prepare a proper reply with supporting documents. If required, request a personal hearing. Timely and complete response is important because the next stage is the adjudication order issued in DRC-07.