DRC-01B because advance adjustment was missing in GSTR-1

How the double count happens

For services, tax becomes payable on receipt of an advance under the time of supply rules, so you report the advance in GSTR-1 and pay tax in GSTR-3B for that month. When the invoice is issued later, the full invoice goes into the B2B or B2C table, and the advance already taxed should be shown in the advance adjustment table so that tax is not counted again.

When the adjustment is missed, GSTR-1 for the invoice month shows the full tax, while GSTR-3B for that month correctly shows only the balance. The gap equals the tax on the advance.

Steps to correct

• List advances received and taxed in earlier months, with receipt voucher numbers.
• Match each with the invoice later issued and check whether the adjustment was reported in GSTR-1.
• Where the adjustment was missed, report it in the next GSTR-1 advance adjustment table, or in GSTR-1A if the period's GSTR-3B is not yet filed.
• In Part B, explain that tax on the advances was paid in the earlier months and attach the receipt vouchers and the relevant GSTR-3B.

Deadline and documents

Reply within 7 days. Keep ready:

• Receipt vouchers issued for advances
• GSTR-1 and GSTR-3B of the advance month and the invoice month
• Ledger showing the advance and its adjustment

What to avoid

• Treating advances for goods the same way as services. Since late 2017 tax on advances for goods is generally not payable at the advance stage for normal taxpayers, so do not report them as taxable advances.
• Issuing a refund voucher for a cancelled order without adjusting the tax reported on the advance.
• Netting the advance against the invoice value directly in the B2B table, which reduces your customer's credit wrongly.

Support

A professional can reconcile advances and adjustments for the year and draft the explanation so the officer can see tax was paid once.

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.