Reply to DRC-01 Show Cause Notice — Sample Draft

[Letterhead of the Taxpayer]
[Legal Name] | GSTIN: [22ABCDE1234F1Z5]
[Principal Place of Business, State, PIN]

Ref: Reply to DRC-01                                Date: [DD-MM-YYYY]

To,
The [Assistant/Deputy Commissioner], CGST & SGST,
[Division / Ward], [Commissionerate],
[Address].

Subject: Reply to Show Cause Notice in FORM GST DRC-01,
         Reference/DIN No. [___] dated [DD-MM-YYYY], issued under
         Section [73/74] of the CGST/SGST Act, 2017 for FY [2022-23] —
         and request for personal hearing.

Summary of demand (as per attached DRC-01 / DRC-02 statement):
   Tax        : ₹[amount]
   Interest   : ₹[amount] (Section 50)
   Penalty    : ₹[amount] (Section [73(9)/74(9)])
   ARN of SCN : [___]

Respected Sir/Madam,

1. The contents of the said DRC-01 are denied except where expressly
   admitted. The demand is not sustainable for the reasons below.

2. GROUND-WISE REPLY
   (a) Alleged excess ITC of ₹[amount] vis-a-vis GSTR-2B: The ITC is
       fully supported by valid tax invoices (Section 16), the goods/
       services were received, and the tax was paid by the suppliers.
       A GSTR-2B vs books reconciliation is at Annexure-A explaining
       the timing difference of ₹[amount].
   (b) Alleged short payment of ₹[amount]: This arises from [reason];
       the correct liability was discharged vide GSTR-3B for [period]
       (Annexure-B).

3. Section 74 is wrongly invoked — there is no fraud, wilful mis-
   statement or suppression; the extended period and equal penalty are
   therefore not attracted (see Annexure-C, return-filing history).

4. Interest under Section 50 is chargeable, if at all, only on the net
   cash liability and not on ITC availed but not utilised.

5. WITHOUT PREJUDICE, the taxpayer has deposited ₹[amount] under
   protest vide DRC-03 ARN [___] (Annexure-D) and reserves its rights.

PRAYER
6. It is prayed that the proceedings under the DRC-01 be dropped and
   that a PERSONAL HEARING under Section 75(4) be granted before any
   order in FORM GST DRC-07 is passed.

Yours faithfully,

For [Legal Name of Taxpayer]

____________________
[Name of Authorised Signatory]
[Designation] | Ph: [___] | Email: [___]

Enclosures:
1. Copy of DRC-01 and summary DRC-02.
2. Annexure-A: GSTR-2B vs books reconciliation.
3. Annexure-B/C: GSTR-3B / return-filing history.
4. Annexure-D: DRC-03 challan (payment under protest).
5. Authorisation Letter / Board Resolution.