Answer

1. F

   Facts

   Rule 88D says that if the excess is not paid or explained, it can be demanded under Sec 73 or Sec 74, or Sec 74A for FY 2024-25 onwards, through a show cause notice, with interest and penalty.

2. P

   Provisions and law

   • Rule 88D, CGST Rules 2017Intimation DRC-01C when ITC in GSTR-3B exceeds GSTR-2B beyond a limit; reply in 7 days
   • Sec 73, CGST Act 2017Demand for tax short paid without fraud, for periods up to FY 2023-24
   • Sec 74A, CGST Act 2017Single demand provision for FY 2024-25 onwards, fraud and non-fraud cases
3. A

   Analysis

   An ignored DRC-01C often turns into a DRC-01A or a show cause notice months later, when interest has grown. A clear Part B reply now, backed by a reconciliation, is the cheapest defence. If the explanation is accepted no further action follows, but keep the papers for audit.

4. C

   Conclusion

   1. 1File Part B even if only partly explaining
   2. 2Keep a reconciliation and supporting documents
   3. 3Watch the notices tab for DRC-01A or DRC-01
   4. 4Reply to any further notice within its deadline

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.