GST form guide · updated October 2026

GST DRC-02 explained: statement of demand for later periods

DRC-02 is the electronic summary of a statement of demand. It is used when a show cause notice has already been issued on a particular ground and the same issue continues in later periods; instead of a fresh notice, the officer serves a statement for those periods.

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How a statement works

Sections 73(3), 74(3) and the corresponding provision in Section 74A allow the officer to serve a statement containing details of tax not paid, short paid, erroneously refunded or ITC wrongly availed for periods other than those covered by the original notice. The statement is deemed to be a show cause notice, provided the grounds are the same as in the earlier notice.

The statement is commonly used for recurring issues, such as ITC on a particular input service, classification of a product, or a valuation method, where the department expects the same issue to repeat each year.

What to check

  • Are the grounds really the same as in the earlier notice; a new ground needs a proper notice
  • Is the period within the time limit for issuing the statement
  • Is the computation consistent with your returns for those months
  • Has the issue been resolved in your favour in the earlier proceeding or on appeal

How to respond

Reply in DRC-06 within the time stated, as you would to a show cause notice. If the earlier notice is already under reply or appeal, you can adopt those submissions and add period-specific facts. If you accept the issue for the later period, pay tax and interest through DRC-03 against the statement to close it and limit penalty.

Common mistakes

Many taxpayers ignore DRC-02 because the main dispute is already in appeal. That leads to a separate order for the later period, which then needs its own appeal and pre-deposit. Treat each statement as a live notice, reply on time, and keep the original notice, reply and appeal papers together.

Get it handled for you

Received a notice like this? Our chartered accountants draft the reply from your records and an authorised representative follows up with the officer, so you do not have to visit the department. Call or WhatsApp +91 63677 44602, or use the form below.

This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.

Questions

DRC-02 — FAQs

Is a DRC-02 statement a show cause notice?+
Yes, it is deemed to be a show cause notice for the later periods, as long as the grounds are the same as the earlier notice.
Do I need to reply if the main case is in appeal?+
Yes. Reply to the statement on time, referring to the earlier proceedings, so no order is passed by default.
Which form is used to reply?+
DRC-06.
Can I pay the DRC-02 amount to avoid penalty?+
Yes. The same payment benefits that apply to a show cause notice apply to a statement, depending on the section under which it is issued.
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