Answer

1. F

   Facts

   Rule 88C itself provides for payment with interest or an explanation. Penalty arises only if the matter goes to a show cause notice under Sec 73, 74 or 74A.

2. P

   Provisions and law

   • Rule 88C, CGST Rules 2017If GSTR-1 tax exceeds GSTR-3B tax beyond the set limit, intimation in DRC-01B Part A; within 7 days pay through DRC-03 or explain in Part B
   • Sec 73(5), CGST Act 2017Tax and interest paid before a notice under Sec 73 means no penalty notice for that amount
   • Sec 74A, CGST Act 2017Demands for FY 2024-25 onwards; no penalty in non-fraud cases if paid before notice
3. A

   Analysis

   Paying a genuine shortfall with interest at the DRC-01B stage is the cheapest outcome. Sec 73(5) and Sec 74A(5) let you pay before a notice without penalty in non-fraud cases. Left unpaid, a notice can add penalty of 10 percent of tax or ₹10,000, whichever is higher.

4. C

   Conclusion

   1. 1Separate genuine shortfall from reporting errors.
   2. 2Pay the shortfall with interest now.
   3. 3Explain the rest with records.
   4. 4Keep proof in case of later scrutiny.

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