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Resolving the “System Checking on Compliance for Form DRC-01C” Error on the GST Portal

Hey all,

Today, I will let you know how to resolve the system-generated error of System Checking on Compliance for Form DRC-01C” Error on the GST Portal and why this error has happened.

Encountering errors while filing GST returns can be a daunting experience, especially when the message displayed is as cryptic as “System checking on compliance for form DRC-01C. Please try to file GSTR-1 again after some time.” In this article, we’ll break down the reasons behind this error, guide you on how to fix it and provide steps for successfully filing GSTR-1 after resolving the issue.

Why is this error showing?

The error message appears when the GST Portal is conducting a compliance check related to Form DRC-01C. This form serves as an intimation sent to taxpayers when discrepancies are found between the Input Tax Credit (ITC) claimed in GSTR-3B and the ITC available in GSTR-1.

Here are some common reasons for this error:

  1. Discrepancies in ITC: You might have claimed more ITC in GSTR-3B than what is available in GSTR-1.
  2. Missed Invoices: Some invoices might have been missed in GSTR-1 reporting.
  3. ITC Entry Errors: Errors in entering ITC details in GSTR-1 can lead to this issue.
  4. Cancelled Invoices: Cancelling invoices that were previously claimed for ITC can trigger this error.

How to fix this error:

To resolve this error, follow these steps:

  1. Reconcile ITC Records:
    • Download your GSTR-2A & 2B report from the GST Portal.
    • Review the report for discrepancies between the ITC reported by suppliers and the ITC claimed in GSTR-3B.
    • Investigate and correct any discrepancies in your records.
  2. File a Reply in Form DRC-01C:
    • Log in to the GST Portal.
    • Go to ‘Returns’ > ‘Reply to Intimation’.
    • Select Form DRC-01C and provide the necessary information.
    • Submit the form after filing your reply.

How to file GSTR-1 after resolving the error:

Once you’ve filed the reply in Form DRC-01C and resolved the discrepancy, follow these steps to file GSTR-1:

  1. Log in to the GST Portal.
  2. Go to ‘Returns’ > ‘File Return’.
  3. Select Form GSTR-1 and enter the required information.
  4. Review the details and submit the form.

Tips to Avoid Future Errors:

  1. Regular Reconciliation: Reconcile ITC records regularly to ensure accuracy.
  2. Thorough Review: Carefully review your GSTR-2A report before filing GSTR-3B.
  3. Accurate Data Entry: Enter ITC details correctly in GSTR-1 to prevent errors.
  4. Manage Cancelled Invoices: Keep track of canceled invoices and reverse claimed ITC in GSTR-

By following these steps and staying vigilant about your data, you can resolve the “System Checking on Compliance for Form DRC-01C” error and file your GST returns smoothly, ensuring compliance and seamless business operations.

Thanks,

Note Point***

You will get help from this Government newsletter for the conclusion.

https://tutorial.gst.gov.in/downloads/news/return_compliance_itc_mismatch_intimation_in_form_gst_drc_01c.pdf

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