DRC-06 – Reply to Show Cause Notice

DRC-06 is the form used by the taxpayer to submit a formal reply to the Show Cause Notice that has been summarised in DRC-01 or extended through DRC-02. It is the taxpayer’s opportunity to present explanations, documents, legal arguments, and evidence against the proposed demand before adjudication. Filing DRC-06 ensures that the taxpayer’s defence is officially recorded and considered before the officer passes a final order.

When a Reply in DRC-06 Is Required

DRC-06 is filed whenever a taxpayer wants to respond to an SCN or supplementary statement issued under Section 73 or 74.

• Filed after receiving DRC-01 (summary of SCN).
• Filed again if needed after DRC-02 adds new tax periods or grounds.
• Used to submit clarifications in audit/investigation-related SCNs.
• Necessary if the taxpayer wants to contest any part of the proposed demand.

Legal Context

DRC-06 forms part of the adjudication process governed by Sections 73 and 74, which require the department to give a reasonable opportunity of being heard before passing an order.

• Enabled under Rule 142(4) of the CGST Rules.
• Must be considered by the Proper Officer before issuing DRC-07.
• Supports the principles of natural justice by allowing representation and defence.
• Can be supplemented with documents, annexures, reconciliations, and legal citations.

What is Included in DRC-06

The form captures the taxpayer’s official response to all issues raised in the SCN and supplementary statements.

• Contains GSTIN, SCN reference number, period, and section (73/74).
• Allows entering detailed written submissions as a defence against the demand.
• Supports uploading of documents such as ledgers, invoices, working sheets, and affidavits.
• Provides space to request personal hearing, if the taxpayer desires one.
• Records any voluntary payment already made through DRC-03.

Practical Usefulness

A well-prepared reply in DRC-06 can significantly reduce or nullify the proposed demand by addressing factual errors, legal mistakes, or computational issues in the SCN.

• Helps counter wrong allegations, mismatches, or ITC disallowances.
• Allows placing audit reports, books of accounts, or reconciliations on record.
• Ensures the officer acknowledges the taxpayer’s stand before adjudication.
• Strengthens the taxpayer’s position in case of appeal, if order goes against them.

After Filing DRC-06

Once DRC-06 is submitted, the taxpayer should attend the personal hearing (if requested or offered) and provide any additional clarifications. The adjudicating authority then evaluates the reply together with the SCN and issues the final demand order through FORM DRC-07.